Taxable sales in Utah soared 8.5 percent during the last quarter of 2004 — new numbers that state officials are welcoming as a sign the economy is indeed on the upswing.

"That's the case," Doug Macdonald, chief economist for the Utah State Tax Commission, said. "These are very good numbers and an indication that Utah's economy is back on the mend."

Lawmakers, of course, already approved a budget of nearly $9 billion during the recently completed legislative session that was based on revenue projections showing they could count on having more than $600 million in new money to spend.

The actual taxable sales for the last three months of 2004, released Wednesday by the tax commission, show that those projections are on track. Taxable sales have continued to climb since the beginning of 2004, following six sluggish quarters.

Gov. Jon Huntsman Jr.'s budget director, Richard Ellis, said the report is good news.

"We went out, we made our estimates and it looked like we'd have a lot more money. This is holding in line with what our expectations were," Ellis said. "It's a reflection of the strength of the Utah economy."

Overall, taxable sales were up 8.3 percent last year. The last time taxable sales climbed so high was back in 1996, when collections were up 9.5 percent. The worst year for growth in taxable sales was 2003, when receipts edged up just 0.1 percent.

People were in the mood to spend last quarter. Furniture, car and home building supply sales posted double-digit increases, and restaurant and apparel sales came close. Tourism benefited, too, with taxable hotel stays up 23 percent and taxable car rentals, 9 percent.

Business investments subject to sales tax also looked good, with a 13.5 percent increase in the fourth quarter. Taxable purchases for the mining industry were up 47 percent, especially in metals and in oil and gas extraction.

Plus, the Tax Commission reported a "very strong" 4.7 percent increase in the average wage paid in Utah that helped boost nonfarm wages and salaries to an increase of more than 8 percent in the final quarter. Bonuses paid were described as "unusually large."

Macdonald said some of the fourth-quarter spending can be attributed to concern that interest rates are rising. Consumers want to pay for big-ticket items like cars and home improvement projects before rates climb much further.

Plus there's the pent-up demand many Utahns may be feeling after some tough economic years. When the economy is virtually at a standstill, it's tougher to go on spending sprees even during the Christmas season. The report shows that wasn't the case this past holiday.

Both Macdonald and Ellis noted it wasn't that long ago that virtually no growth in the economy was forecast. "We were starting to scramble and saying, 'Uh-oh, the bottom's falling out,' " Ellis said. Now, though, he said, "we're seeing that positive trend, quarter to quarter."

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