Skip to main content

Confirm opening of the external link

The Utah Business Scene: An Analysis of Market Trends, Key Industries, and Investment Opportunities
by Adam Torkildson
>
April 17, 2023
Rating
Utah

Utah's business scene is thriving. The latest data shows the state is home to 313,590 small businesses, representing 99.3 percent of all companies. The Beehive state's business-friendly policies, robust tech ecosystem, and diverse economy create an ideal place to build a profitable business.

Thinking about starting a business in Utah? This article will explore the state's key industries, market trends, and investment opportunities. 

Market Trends in Utah

Utah's business landscape shows strong growth. The state currently has a low unemployment rate of 2.4 percent and a GDP growth rate between two to four percent this 2023. These numbers were possible because many Utah businesses shifted to online sales and services to stay afloat during the pandemic. The pandemic was also critical in spurring growth in specific industries like healthcare. 

An even more plausible example is how the Utah economy embraced diversification. The state ranked first with a rating of 97.1 on the Hachman Index, which measures economic diversity. Utah is no longer reliant on traditional industries such as agriculture and mining. It is now rapidly expanding its tech and healthcare industries.

It helps that the state maintains its business-friendliness approach. Policymakers were quick to lower taxes and introduce new regulations. These decisions proved to be critical drivers for growth. It’s also worth noting that the government continues to work toward economic success. 

The Governor's Office of Economic Development (GOED) spearheads numerous initiatives, particularly in the development of rural Utah. In the 2020 fiscal year, GOED invested over $80 million in grants and credits, encouraging more than $196 million in investments. 

That said, it's no longer surprising that entrepreneurs consider Utah an excellent state to start a business

Key Industries and Investment Opportunities in Utah

Several investment opportunities exist in various industries in Utah. Here are some of the critical sectors in Utah that present excellent investment opportunities. 

Health care and social assistance

The healthcare and social assistance industry posts positive growth due to the state's aging population and increasing demand for healthcare services. 

The healthcare industry contributes $13 billion to Utah's economy annually. Despite declining employment numbers in Utah's healthcare sector, the industry remains stable enough to promote economic growth. This sector remains the state's largest employer.

What's encouraging this growth in this industry? Utah's aging population may be a primary contributor. The declining school-age population in the state indicates a growing need to invest in healthcare will become a priority. According to this report by the Kem C. Gardner Policy Institute, the decline in the school-age population will become palpable n 2024. This drop will persist until 2035. 

Accommodation and tourism

Based on The State of Utah's Travel and Tourism Industry 2023 report, the sector contributes $10.56 billion to Utah's economy annually. It continues to employ over 130,000 people.

During the 2021-2022 season, Utah ski resorts reported a record high of 5.8 million visitors. The national park visitation across the US decreased by approximately 6.7 percent to 10.5 million compared to the previous year. 

According to the same report, the sales generated by Utah's accommodations reached $2.6 billion in 2021. This number shows a substantial 53 percent year-over-year increase. When adjusted for inflation, this figure is up 12.3 percent from 2019. The forecast for 2022 suggests that there will be a further 10 percent increase in accommodation sales.

That said, accommodation and tourism remain worthy industries for businesses to consider. 

Construction

The state's growing demand for new housing and infrastructure encourages growth in the construction industry. The real estate industry alone contributes $17.1 billion to Utah's economy annually

It's also worth noting that Utah still has a considerable backlog in housing. A study found that Utah leads in the number of new homes constructed per 1,000 residents. This translates to a construction rate of 11.7, more than twice the national average of 5.23. 

Those who wish to invest in the construction sector will find government support quite appealing. The state recently launched the Construction Business Registry (CBR). This registry will serve as a directory for licensed construction professionals in Utah.

Technology

Utah's ski resorts are just some slopes attracting interest. Utah's tech industry has been growing at an impressive rate. It continues to attract significant investment and attention from domestic and international players.

Thanks to its robust tech ecosystem, the state is showing potential to boost its reputation as a tech hub. The industry already has an annual contribution of $20.1 billion to Utah's economy. It's home to major tech companies and a thriving startup scene, with almost 8,200 tech companies setting up shop.

Utah boasts a highly skilled and educated workforce, with top universities and tech-focused training programs. The success of Utah's tech industry is also a result of the state's proactive approach to supporting entrepreneurship and innovation. 

The state has implemented various programs and initiatives to promote startup growth. They also provide plenty of support to entrepreneurs. Regarding investment opportunities, Utah's tech industry offers a range of options for both early-stage and established investors. The state is home to several prominent venture capital firms supporting business growth. 

E-commerce

Another booming industry in Utah is e-commerce, contributing as much as $11.4 billion to the economy

An analysis of the market shows that the state's robust economy provides a conducive environment for businesses to thrive. The economy's growth implies high purchasing power, essential for e-commerce businesses that rely on consumer spending.

The state's low cost of living means reduced overhead costs such as rent and utilities. This can significantly improve profitability, allowing business owners to focus on growing their venture.

Moreover, Utah's young and tech-savvy population provides a ready market for e-commerce businesses. This demographic is highly receptive to online purchases, and their high adoption of technology means they are comfortable transacting online. 

Utah also has a high rate of smartphone usage is a significant advantage for e-commerce businesses. It allows companies to attract a wider audience, boosting their potential customer base.

Utah's transportation infrastructure, which includes a well-developed road network and multiple airports, is also favorable for e-commerce businesses. This infrastructure allows for efficient transportation and delivery of goods domestically and internationally to customers. This can spur the growth and expansion of e-commerce businesses in the state.

The state's pro-business regulatory environment further supports the growth and success of e-commerce businesses. Utah has a low corporate tax rate and business-friendly regulations. This creates an environment encouraging entrepreneurship, innovation, and development — a perfect formula for e-commerce businesses to establish and operate. 

Explore the Utah Business Scene

Utah's business scene also faces several challenges, such more affordable housing, transportation infrastructure, and labor. However, the state's government and private sector are actively working to address these challenges. The government launched several initiatives, such as affordable housing programs and investments in transportation infrastructure.

Utah's diverse economy, business-friendly environment, and thriving industries make it an excellent place for businesses to invest. Companies should consider the state's primary industries and potential return on investment when deciding where to invest.

 

SHARE THIS ARTICLE
About the author
Adam Torkildson
Adam Torkildson
Adam is a long-time resident of American Fork, UT. He serves in several local service organizations and advises several startups that he's invested in or founded.
Read full bio
CONNECT
712 H St NE PMB 98848
}
Washington, DC 20002
‪(385) 212-4777‬

Copyright © 2024 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

Chat generously provided by:LiveChat

In partnership with
Jump back to top