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Regional Review: Mountain States Successfully Meet Economic Challenges

August 2012
Glanbia Foods, located in Southern Idaho’s “Magic Valley”
Glanbia Foods, located in Southern Idaho’s “Magic Valley”
Over the past 12 months, the Mountain States' economies have been driven by a mixture of modern and emerging sectors - such as information technology (IT), which drove significant investment and job growth - and old standbys like dairy, which also opened the door for expansion - even as the region braced to learn the economic impact of devastating fires that occurred in June and July. And while the region's housing market continues to deal with uncertainty, a small turnaround in that segment helped deliver a slight improvement in construction employment.

IT and Other High-Tech Expansion
Utah, in particular, saw significant economic expansion in the IT sector over the past year, with Adobe and eBay breaking ground on campuses, each of which totaled 40 acres. The Adobe project, right on the border between Salt Lake County and Utah County - in the heart of the state's biggest population center - is expected to create 1,000 jobs, and earned the company a $40 million tax break from the state over 20 years. The eBay project, located in Draper, is expected to add 2,200 jobs (more than doubling eBay's employment in the community). Slated to open in 2013, the eBay project got a 20-year tax break of $38.2 million from the state.

Also in Utah, the announcement by ITT Corp. that it will expand the operations of ITT Excelis in Salt Lake City means the company will add about 100 employees per year for an indefinite period. ITT will locate the composite-structures operation to a new 300,000-square-foot facility near Salt Lake City International Airport.

Data services drove significant job growth over the past year in Wyoming, with companies at both ends of the size spectrum expanding in the state. Microsoft announced a $112 million investment in a new data center in Cheyenne that will result in the creation of 40 new jobs. Cheyenne-based Green House Data announced it would invest $35 million in a new 25,000-square-foot, high-density facility that will create approximately 25 new jobs, while Sheridan-based Ptolemy Data Services announced plans to build a 5,500-square-foot data center in its home community.

Dairy & Other Industry Growth
If the high-tech world drove some economic development in the Mountain States, the decidedly low-tech dairy cow made a difference too.

Idaho's long-standing strength in the dairy industry helped land the state two major economic development wins during the past year - both in the city of Twin Falls. Greek yogurt manufacturer Chobani is building a second manufacturing facility in the city - representing a $128 million investment in a high-capacity production facility occupying up to 200 acres of agricultural and industrial land and creating 350 jobs.

Meanwhile, Glanbia Foods - a producer of cheeses that have won awards internationally - plans to invest $15 million to build a state-of-the-art innovation center and corporate headquarters in Twin Falls. It will include a 35,000-square-foot office complex and a 14,000-square-foot research center that will focus on new product innovation efforts. Glanbia expects to initially hire 100 people at the facility, and eventually expand that number to 150.

Lisa Buddecke, a spokeswoman for the Southern Idaho Economic Development Organization, cited the state's strength in dairy in helping to attract both projects. Idaho ranks third in the country for milk production as well as cheese production. Both sectors are focused in the south-central region of the state known as The Magic Valley.

Other major developments in the region include the Denver-based commercial vacuum manufacturer Vacutech relocating the company to Sheridan, Wyoming, citing lower costs of doing business and better quality of life. The company is investing $2 million in a new facility that will employ 35 people. Also in Wyoming, Cody Laboratories will add a 24,000-square-foot warehouse and 45 employees; and Brunton Outdoor Group is returning its baseplate compass manufacturing operation to Riverton, bringing with it 50 jobs.

Meanwhile, Procter & Gamble announced it would build its first greenfield plant in over 40 years in the small rural community of Corinne, Utah. The planned one-million-square-foot manufacturing/distribution facility represents a $300 million investment.

Tackling the Unemployment Problem
Things got very tough for Nevada when the nation hit a severe economic downturn in 2008 - prompting the state to create a cabinet-level economic development position in the governor's office. The result? According to Nevada's new Director of Economic Development Steve Hill, Nevada's unemployment peaked at 14 percent in 2010, but is now down to 11.7 percent.

Still predominantly driven by tourism and hospitality, Las Vegas establishments lost some 60,000 jobs during the economic downturn, although indications this year are that as many as 15,000 of those jobs may be returning. The biggest driver of Nevada's unemployment, however, was construction, which accounts for 12.5 percent of the state's work force. (The average for all 50 states is 5 percent.) With new home construction falling from a peak of 40,000 in 2006 to just 4,000 in 2011, construction employment took a major hit.

"We still have a lot of people in the state that are out of work," Hill says. "For example, we have a large gap in healthcare workers per capita vs. the national average, so we're studying that issue pretty carefully.because there is a significant opportunity to create jobs around healthcare." The state is also focusing on opportunities in IT, aerospace/defense, renewable energy, and logistics and distribution.

Montana also saw its unemployment rise, peaking at 7 percent during summer 2011 following a long ascent that begin in 2007. Montana finally saw its unemployment rate decline over the past 12 months, settling in at 6.3 percent in May 2012. The biggest jump for Montana came from construction, which saw a 15.2 percent increase in employment during that same period.

After peaking at 9 percent late in 2010, Colorado's unemployment rate continued a steady decline over the past 12 months, dipping briefly below 8 percent and settling at 8.1 percent in May 2012. The state's biggest employment gain came in mining and logging, which saw a 6.6 percent increase in employment, followed closely by construction at 6.3 percent.

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