A Spotlight on the Mountain States: The Kiplinger Letter

To help you understand what is going on in the economy our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Idaho will lead the way economically among the Mountain states this year, with job growth of 2%. People are still flocking to the Gem State, though the rate has fallen considerably since the pandemic. Housing prices in Idaho have risen faster than in any other state over the past five years as the population rose. Construction, healthcare and state government are all hiring briskly to keep up. Drought figures to crimp farm profits, but farm income should still come in strong, and a possible shift to a La Niña weather pattern this year could lead to more rainfall. 

The University of Idaho agreed to purchase the for-profit University of Phoenix. They want to convert the mostly online school into a non-profit. However, the Idaho legislature is opposed, and the deal may fall through.

Wyoming will be close behind Idaho, as its employment grows by 1.9%. Energy is a major driver of the state economy, from oil, gas and coal to solar power and wind farms, and even a proposed nuclear plant near Kemmerer — a real rarity in a nation that has built almost no reactors in recent decades. AES Corporation will build a 150 MW, 40-turbine wind farm near Glenrock, to open in late 2026. A 500 MW solar farm nearby is going through hearings currently, and could also open in 2026. A solar project is under construction near Cheyenne, and another is planned near Yoder. PacifiCorp’s control center for the over 1,000 wind turbines it runs in the West is in Casper.  

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An underground carbon storage site is planned near Gillette, which may have a better shot at going forward because the pipeline to bring in the CO2 would be relatively short. Major deposits of rare earth elements needed for high-tech gear are also promising. The state has the potential to become a world leader in rare earths mining, with major deposits near Wheatland, Upton, and Sheridan. American Rare Earths says that its Wheatland deposits are much larger than previously known, at 2.3 billion tons.

Arizona is also growing swiftly, on tap for 1.5% employment growth. The state’s labor force has been rising steadily, helped by the continued in-migration that has boosted the construction and health care sectors, especially. The state has become a major hub for semiconductor production. TSMC has an enormous plant under construction north of Phoenix that is scheduled to open by 2025 and has plans for a second one to open by 2028. Intel is also investing heavily in Arizona, which could host the future federal center for semiconductor research.

Home building in the Phoenix metro area is expected to be a bit better this year. Traditionally, housing development in this area took place on the southeast side, called the East Valley. But the west and northwest sides along Route 303 are now getting attention, with a big data center project slated for Buckeye. The main constraint appears to be water, though the rise in the level of Lake Mead helping for now. Blackstar Orbital is going to build its hybrid spaceplane/satellite at the Siera Vista airport near the border in 2026. … The 2024 National Pickleball Championships will take place in November in Mesa this year. 

Utah will rival Arizona, with job growth of 1.5%. The jobless rate is just 2.8% in Utah, though that’s up a bit from last year. In-migration is slowing, taking pressure off home prices, which should tick up only 1-3% this year. Salt Lake City and Provo have seen hiring slow the most, whereas Ogden is still strong. Lithium extraction from the Great Salt Lake using a more environmentally friendly method could go ahead in a few years. The company behind it, Lilac Solutions, hopes to be operating by 2026. Western actor Kevin Costner is building an elaborate film studio in St. George called  Territory Film Studios. It will have sound stages, warehouses, offices, and a restaurant. Northrop Grumman is planning an expansion in its rocket division, spending $1 billion and hiring 1,200. 

Montana's job growth is a bit slower at 1.3%. As in Idaho, the population is growing rapidly, thanks to in-migration, though that trend has been slowing. Drought is a serious problem for farmers, as dry conditions spread east this year. Cattle ranchers are benefiting from high beef prices, but drought has thinned herds. It will take a few years to get herd sizes back to normal. The local firearms industry is growing, with new plants on tap in Glendive and Helena. German-based VACOM, a vacuum components manufacturer, will establish its U.S. headquarters in Lewiston, bringing 500 jobs.

Colorado is last on the list, with solid job growth of 1.1%. The labor market is tight, with the most unfilled jobs of any state in the region. Hiring is going strong in healthcare and local government, but other sectors are soft. Denver is struggling with an influx of illegal migrants, and the state legislature is debating a measure to curb new oil and gas development, which contributes 4% to the state’s GDP. Longmont is making a bid to become a semiconductor hub with state financing. Goose Gear, a maker of off-road vehicle accessories, is moving its HQ to Grand Junction. The strongest population percent growth is occurring in the central interior west of Denver and in the southwest corner of the state.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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