Index points to tough times for Utah small businesses

Index points to tough times for Utah small businesses

By Jasen Lee, Deseret News
Published: March 10, 2009

An indicator of Utah's small-business strength continued to show weakness in February.

The Zions Bank Small Business Index for Utah was 68.0 in February 2009, up from a revised 65.5 in January 2009, according to a news release.

Despite the slight uptick, the index — initiated in 1990 — still hovered in record-low territory.

"The last two months in the 60s is the lowest its been since we've been doing it," said Kendal Oliphant, senior vice president of Salt Lake City-based Thredgold Economic Associates, which compiles the data for the index.

The index measures business conditions in Utah from the perspective of the small-business owner or manager. A lower index number depicts less favorable business conditions for Utah's small businesses, using 100.0 for calendar year 1997 as its base year.

"In terms of Utah, there is probably more pain coming," Oliphant said. "We were kind of slow to jump on the recession bandwagon, but now Utah is in a full-fledged recession."

The current U.S. recession, already 15 months in duration, is likely to continue throughout most of 2009, negatively impacting Utah's small-business sector, the report said.

Utah's unemployment rate was estimated at 4 percent in the latest month, up from the prior month's revised 4.1 percent rate, Oliphant said. Utah lost an estimated 20,400 jobs during the past 12 months, he said.

Nationally, the economy lost an estimated 651,000 net jobs in February, matching economists' expectations, according to the report. The U.S. unemployment rate rose to a 25-year high of 8.1 percent.

U.S. and global economic performances are components of the Small Business Index for Utah. As a result, weaker performances for both economies contributes to a lower index measure, the release stated.

Oliphant said the nation is expected to pull out of the recession by the end of this year. As for Utah, he predicts the Beehive State will probably follow suit "once the U.S. returns to positive growth."

But that growth will likely not come before the state feels even more job loss pain, Oliphant said.

"We expect unemployment to continue to rise even into next year in the U.S.," he said. "Utah is going to see the same pattern."

It will likely be some time next year before Utah begins to experience job growth again, Oliphant said.

"Small-business conditions are very tough in Utah right now," he said.

E-MAIL: jlee@desnews.com
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