Tuesday, October 8, 2013

Grand County’s Highly-Seasonal Labor Economy

Eric Martinson, Economist

One of the great aspects of Utah’s overall economy is in its diversity. Utah’s economy has consistently been able to mirror the nation’s economic diversity, with manufacturing in the northern Wasatch Front and Wasatch Front regions, oil and gas in the Uintah Basin, coal mining in Castle Country and the tech hub of Utah County. Another important industry which capitalizes on Utah’s diverse geographical landscape is tourism and recreation, from skiing in the winter in the Wasatch Mountains to spring-through-fall recreation in red rock country. Home to the ultimate red rock experience in Moab, Arches and Canyon Lands (among other recreational hotspots), Grand County is a mecca for those wishing to recreate, which occurs mostly during the warmer months of the year. The unique nature of this local economy provides and interesting dynamic in its highly-seasonal labor market activities. I have created three visualizations illustrating the degree of Grand County’s seasonality in terms of employment activity.

Figure 1: Grand County Total Nonfarm Payroll Employment, January 2001 to March 2013

Click graph to enlarge
    • The degree of peak-to-trough employment is quite apparent. This is indicative of the high summer employment (driven by summer tourism and recreation) and relatively low employment in the winter.
    • With the exception of one year (2005), all peak employment months were hit in June for Grand County. The peak employment in 2005 in Grand County was in July. Trough employment typically hits in January of each year.

      Figure 2: 2012 Monthly Total Nonfarm Payroll Employment, Indexed Grand County versus Statewide (Index: January 2012 Employment = 100) 
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        • The index was implemented as a way to compare two different economies, not just with locational difference but in terms of magnitude as well. The index sets January 2012 nonfarm payroll employment to an index of 100 points and the deviation from that value within the different areas (statewide and Grand County) can be seen in subsequent months.
        • At a statewide level, employment from January to December of 2012 is on a gradual increase, with the slight yet noticeable dip over the summer months (due to seasonal factors like the drop in employment within education during the summer months, etc.).
        • In contrast to the gradual and steady month-to-month increase (in general) characteristic of the statewide employment data, Grand County, by comparison, is markedly seasonal, with employment peaks typically hitting in June and employment lows in January.
        • Figure 2 shows total nonfarm payroll employment. This is irrespective of industries that are more or less seasonal than others. The highly-seasonal nature of the county’s total employment is driven predominantly by the magnitude of the leading industries which are highly seasonal, i.e., retail trade and leisure and hospitality.
        Figure 3: 2012 Monthly Leisure and Hospitality Payroll Employment, Indexed, Grand County, Summit County and Statewide (Indexed: January 2012 Employment = 100)

        Click graph to enlarge
        • Figure 3 shows leisure and hospitality employment (comprised of accommodation and food services and arts, entertainment and recreation industries) which has been indexed in the same way as Figure 2. Employment for Summit County, another of the state’s highly-seasonal economies, is also shown, mainly to provide comparison and to show an employment market that is essentially counter-seasonal to that of Grand County’s.
        • An important takeaway here is the degree of seasonality within Grand County’s leisure and hospitality employment, even compared to Summit County. It grows from the index number of 100 in January to 231 in June and falls back to 128 by December.
        • The winter economy in Summit County, home to ski resorts in the Park City area and host of the vibrant Sundance activities, can be seen in this indexed trend. Also interesting to note is how the employment index grows during the summer months in Summit County, where the ski resorts are used as summer recreational playgrounds. Employment subsequently dips during fall before gaining again in the winter. Were it not for the multi-use of winter terrain as summer recreational terrain, summer employment (and of the overall economy by extension) in Summit County would likely be lower.