Zions Bank's monthly survey of small business conditions dipped slightly in November, but the bank remains optimistic about the state's economy in the new year.

Zion's Small Business Index for Utah declined to 113.2 in November, from a revised 113.7 in October.

Released Tuesday, the index measures business conditions from the viewpoint of the Utah small-business owner or manager. It uses 100 for calendar year 1997 as its base and includes revisions to various historical or forecast components as they become available. A higher figure is associated with favorable business conditions.

Jeff Thredgold, economic consultant to Zions Bank and head of Thredgold Economic Associates, attributed November's decline in part to a decline in Utah's unemployment rate. The most heavily-weighted component of the Index, Utah's unemployment rate was estimated at 4.5 percent in October (the most recent data available), which was down from September's revised 4.7 percent rate.

A decline in the unemployment rate is a negative factor in the index because it implies that small business owners are facing a tighter labor market, making it harder to find and keep qualified employees.

However, Thredgold said that on balance, Utah's economy is doing well.

"Of the 11 major employment sectors measured in Utah, we've added jobs in every single one, led by construction and business services," he said. "That says something about the health of the Utah real estate sector right now."

According to a report on Utah's third-quarter home prices released by the Wasatch Front Regional Multiple Listing Service in October, the median price for a home in Salt Lake County jumped to $189,500, up 12.8 percent from $168,000 in the third quarter of 2004. The median home price in Utah County increased 11.3 percent in the year-over period, to $179,000, according to the report. In Davis County, the median price of a home was at $177,900, up 10.8 percent.

"The fact that Utah has really lagged the country for the last five or six years in terms of home price appreciation suggests that 2006 should be a good year as well for rising home prices," Thredgold said. "That, tied to the fact that the economy is rock solid, tied to the fact that we're attracting people to the state, bodes well for the economy."

The other major factor in the Zions index, Utah's total employment, rose by about 43,000 jobs over the past 12 months, one of the strongest annual gains in eight years. Job gains have a positive impact on the index, because they suggest greater income creation and increased spending.

Looking ahead, Thredgold said he is optimistic about the holiday shopping season but remains concerned about what will be the impact of home heating bills on consumers.