Small-business conditions drop

For the fourth consecutive month, the Zions Bank Small Business Index for Utah has declined, coming in at 96.3 for March, a decrease from a revised 97 for February.

The index has dropped more than 10 points since December, when the revised index was 107. The March figure was the lowest the index has been since 2003.

The index measures business conditions from the viewpoint of Utah small business owners and managers, using 100.0 for calendar year 1997 as its base year. A higher number indicates greater likelihood for business success, while a lower number is associated with less favorable business conditions, said Kendall Oliphant, senior vice president of Thredgold Economic Associates, which compiled the report for Zions Bank.

The decline is indicative of what analysts expect for Utah's economy during the next several months, according to Oliphant.

"2008 for the small business index is going to be significantly lower than 2007 was," he said. "The reasons are the slowing economy, slower job growth, slower personal-income growth, slower retail sales and a number of other factors."

Despite the index's expected decline, the state should still outpace the national index, which currently sits at an all-time low of 65.5 and has been in the 60s since the start of the year, he said.

Utah's decrease in employment growth would be the most-heavily weighted factor in the index's continuing trend downward.

"We would probably see the small business index fall in the mid- to upper-80s by the end of this year," Oliphant said. The last time the Utah index was that low was in 2001, when the nation last experienced a recession.

Utah's unemployment rate was estimated at 3.0 percent in March, which was the same as the prior month's rate. The report stated that employers added an estimated 28,100 new jobs during the past 12 months.

In contrast, the U.S. economy lost nearly 250,000 jobs in the first quarter of this year, and the nation's unemployment rate rose to 5.1 percent in March.

While the national economy continues to struggle, Oliphant said Utah will experience some similar problems this year.

"We won't experience the recession the way the U.S. as a whole is experiencing it — at least not to the same degree," Oliphant said. "But we're going to see some pain in the future."

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