Dejan Eskic was blunt in his assessment of Utah's 2026 economic outlook during a January 13 presentation to the American Concrete Institute (ACI), Intermountain Chapter, remarking in his opening statement, "I feel like we're living in a season of the [television] show '24', where every episode, you're holding your breath."
Eskic, Sr. Research Fellow at the Kem C. Gardner Policy Institute at the University of Utah, was talking about geopolitics, specifically referencing the economic impact of the Trump Administration’s global tariffs after a year, and how economic outlooks are not so easy to predict when dealing with the potential impact of national and international factors.
"Part of talking about economics, it can get political," he continued. "I try not to be political about it, but it's hard to unravel the two, right? Whatever [information] President Trump releaes on whatever media platform has influence on the market. Tariffs really brought a lot of uncertainty and made the market very skittish."
Eskic said tariffs are his "least favorite subject, because we haven't had to talk about it for 100 years, and all of a sudden it's gone haywire—there's a lot of uncertainty with tariffs." He added that the Gardner Policy Institute will release a white paper detailing tariff impacts later this year.
Interest Rate Cuts Not Anticipated in 2026
The Fed did not cut interest rates at its first meeting of the year on January 28, and Chair Jerome Powell believes keeping the current rate of 3.5% to 3.75% is prudent, with stabilizing unemployment and inflation rates signaling a steady economic year.
"Employment rates have stabilized to the point where they're not forecasting a rate cut. I think they're anticipating steady rates between 3.5% and 3.75%," said Ryan Starks, Executive Director of the Economic Development Corporation of Utah. "Just having that predictability is the most important thing."
Home mortgage rates took a sharp dip in January, Eskic reported, from 6.8% to 6%, which is something "you pay attention to" considering it happened in just a few days. Steady rates mean developers know exactly what to expect and can determine whether or not to pull the plug on projects that have been paused while more favorable rates are seen.
Utah Expected to Have Moderate Economic Growth
Eskic cited the Gardner Institute's 2026 Economic Report to the Governor when announcing a slew of favorable projected stats that underscore moderate 1.5% economic growth, including:
• Steady job growth of 1.5%, including a robust 3.2% construction job growth (143,000 jobs);
• Rising average wages of 3%-4%, with some construction trades expected to eclipse 5% wage growth;
• Continued population growth, albeit at a slower 1.3% clip overall; Utah County led the way with 2.1% growth;
• Low state unemployment rate of 3.3% in 2025, significantly better than the national average of 4.4%.
While these numbers are down from peak totals within the past decade, they still portend a growing economy, with construction playing a vital role in the state's overall economic health.
AGC Optimistic for Another Solid Year
The Associated General Contractors of Utah (AGC of Utah) remains a steady voice for construction in the Beehive State, and its members "are cautiously optimistic about 2026, with the strongest confidence in infrastructure, power, and data-driven projects," said Joey Gilbert, AGC of Utah President/CEO, citing his association's record-level 700+ members statewide as an indicator of the health of the industry.
“Utah's biggest structural advantage is that it's still a growth state with strong population gains and job growth creation with durable demand for housing, commercial space, and public infrastructure," added Robert Spendlove, Chief Economist for Zions Bank. "We also benefit from a relatively healthy labor market and strong household fundamentals. Utah's unemployment rate (hovering around 3%) remains lower than the national average (4.4%), and wage growth has been running above the U.S."
That's not to say everything is peaches and cream, as job growth "has cooled compared to the post-pandemic surge," said Ken Simonson, AGC of America Chief Economist. "Contractors are still dealing with labor pressures, wages are expected to keep rising 4%-5%, and policy actions affecting labor availability could make staffing harder in 2026. At the same time, the national data show job openings have fallen, which is consistent with a market that's still tight in key trades, but less overheated than a year or two ago."
Gilbert agreed that construction labor in Utah has steadied a bit, saying "the labor market is still tight but stabilizing, with steady wage growth and increased focus on workforce development and retention."
There are other tailwinds in Utah's favor as 2026 begins. Spendlove said, "Utah's underlying economic fundamentals remain strong: population growth (about 1.5%) and employment growth (north of 2.0%) are still outpacing the U.S., which supports a steady pipeline of construction demand. “
Simonsen agreed that Utah remains a hot business market—yet again—to have another solid year. “Utah remains resilient. The opportunity set in 2026 looks best where demand is most durable—data centers, power, and infrastructure. Utah is well-positioned to compete [nationally] in those areas. Even with uncertainty, contractors are planning, not freezing. The main watchouts are financing conditions and cost volatility, but there's still meaningful work in the queue.”
Gilbert added, ”Utah's construction industry is well-positioned in 2026 due to strong economic fundamentals and sustained demand in key sectors.”
Demand Brisk for Data Centers, Infrastructure, Energy, Other Markets
Contractors and designers recognize the rapidly rising demand for data centers, and therefore, the energy to drive power-thirsty—not to mention water-thirsty—projects, and are positioning themselves accordingly.
Utah Governor Spencer Cox has "Operation Gigawatt" rolling, a 10-year initiative started in 2024 to develop new energy production across multiple power sources.
"It's absolutely essential that we get in front of energy," said Starks. "We're seeing that from a population growth standpoint, but also from a commercial growth standpoint. With more development taking place, somebody's got to take the lead, and we feel like Utah is well-positioned to be that leader. The Governor wants to double energy production as part of the 'Operation Gigawatt' initiative. Our approach to energy is an 'all-of-the-above' approach—natural gas, solar, nuclear, geothermal."
Gilbert said Utah's legislative leaders are keen to see Governor Cox's energy ideas come to fruition.
"Their priorities are energy production and reliability," said Gilbert. "Senator [Stuart] Adams believes the state that controls AI will control the world. AI demands power and a lot of it. [State legislators are] dedicated to making sure Utah has infrastructure and power resources. We're looking at energy resources, from nuclear to solar and everything in between."
