Report: Utah's business conditions slipped in March

By Brice Wallace, Deseret News
Published: Thursday, April 2, 2009 6:09 p.m. MDT

Utah's small-business environment worsened in March but still was better than it was in January, according to a report issued this week.

The Utah Business Conditions Index, produced by the Goss Institute for Economic Research, was 41.9 in March, down from February's 45.5 but better than January's record-low 36.5.

A figure above 50 indicates an expansionary economy over the course of the next three to six months. The index is based on a survey of the state's supply managers.

March's 41.9 "points to a continuation of the economic recession," the institute said.

"The recession came to Utah about the same time that it hit the U.S.," Ernie Goss, director of the institute and director of Creighton University's Economic Forecasting Group, said in a prepared statement.

Between the beginning of the national recession in December 2007 and February 2008, Utah lost more than 32,000 jobs, for a 2.5 percent reduction, he said. "This rate of job loss is roughly two-thirds that of the nation. Our job indices over the past several months are consistent with an additional 35,000 jobs lost by the end of the third quarter of this year."

Components of Utah's overall index for March were new orders at 50.4, production at 41.6, delivery lead time at 42.3, inventories at 40.4 and employment at 35.0.

Utah is part of a three-state Mountain region that had an index of 39.2 in March, down from February's 44.6 but up from January's record-low 31.6. The figure indicates recessionary conditions for the region through at least the third quarter of 2009, the institute said.

"While the region has clearly dipped into a recession, the overall economic downturn is going to be more shallow for the region than for the nation," Goss said.

Colorado's index was 41.3 in March, down from 43.5 in February but better than January's 30.5. The Wyoming figure was 40.8, worse than February's 44.8 but improved from January's 35.3. The March figure marked first time since surveying began in 1994 that Wyoming's index was below 50 for four consecutive months.

The three-state region's confidence index was at its highest level since January 2007. The index grew to 58.5 in March. It was 31.5 in February and 23.6 in January.

"Our survey was conducted after Treasury Secretary (Timothy) Geithner announced the latest U.S. Treasury bank plan but before the mounting problems of GM and Chrysler surfaced," Goss said. "I think economic expectations, as expressed by supply managers, got ahead of the economic fundamentals."

The institute uses the same methodology as the Institute for Supply Management, which said Wednesday that the national index rose to 36.3 last month from 35.8 in February. It reached a 28-year low of 32.9 in December.

E-MAIL: bwallace@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved