Outlook improves for Utah small businesses

Outlook improves for Utah small businesses
Deseret News
Feb. 9, 2010

The outlook continues to improve for Utah's small businesses, according to a monthly gauge released Tuesday by Zions Bank.

The Zions Bank Small Business Index for Utah was 88.7 in January, up from a revised 82.5 in December.



While the experts believe that what's being called "the Great Recession" ended in the summer of 2009, after a nearly two-year run, unemployment continues to dog recovery. Normally, having low unemployment rates is considered a bad thing for the index, which looks at economic conditions through the eyes of small-business owner or managers. Higher unemployment rates usually mean businesses have a larger pool from which to pluck good employees.

Utah's unemployment rate, estimated at 6.7 percent last month, was a continued climb from the previous 6.3 percent rate of the month before, with 34,700 jobs lost over 12 months. A year earlier, unemployment was 4.1 percent. Nationally, more than 8 million jobs have been lost.

The high unemployment, coupled with weaker consumer spending, has created "business challenges" that negatively impact the index, according to Jeff Thredgold of Thredgold Economic Associations, which prepares the report. A rising jobless rate "also suggests weaker job gains or greater losses, lesser income growth and slower retail spending, all factors which lead the index lower," he wrote.

The index notes that unemployment rates "have likely peaked in many states" but said others may move slightly higher in coming months.

The good news is that the U.S. economy has seen some growth over the past six months, and that will eventually benefit the states, which are still suffering effects of recession, according to Thredgold.

The index uses 100 points for calendar year 1997 as its base year and is revised as new data becomes available.

e-mail: lois@desnews.com
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