Small Business Index up to 104.8

Continued strength in the U.S., local and global economies is adding to Utah's small-business vibrancy, according to a new report from Zions Bank.

The bank's Small Business Index, released Tuesday, rose to 104.8 in November, up from a revised 103.4 the month before.

The index measures business conditions from the viewpoint of the Utah small-business owner or manager. A higher index number is associated with more favorable business conditions for Utah's small businesses. The index uses 100.0 for calendar year 1997 as its base.

"We did see a fairly decent bounce, from 103.4 to 104.8," said Jeff Thredgold, economic consultant to Zions Bank. "It's really tied to more and more data that shows that Utah's economy is doing substantially better."

Utah's unemployment rate, the most heavily weighted component of the Zions Bank index, was estimated at 4.8 percent in October (the most recent data available), up slightly from the previous month's revised 4.6 percent. A higher unemployment rate pulls the index higher, because it implies that Utah businesses have more access to labor.

Total employment, another factor in the index, rose by about 3.1 percent, or 34,200 jobs, during the past 12 months, Thredgold reported. Job gains also have a positive impact on the index, because it generally leads to greater income and retail spending.

"Our job growth, at 3.1 percent, is the best Utah has seen in six years," Thredgold said. "In terms of where we've been, the last time we generated 3 percent or better job growth was 1998. Right now, we're running 3.1 percent for the last 12 months."

The national unemployment rate declined slightly to 5.4 percent in November, the U.S. Labor Department reported earlier this month. Net employment rose by a modest 112,000.

Still, Thredgold wrote in the report, "The U.S. economy continues to grow at an impressive clip, one that is expected to continue in 2005. The U.S. economy grew at a 4.6 percent real (after inflation) annual rate during the 18-month period ending Sept. 30. This was the strongest 18-month period for the U.S. economy in the past 20 years."

Locally and nationally, expectations for the coming year are positive, Thredgold said. The U.S. economy is benefiting from global economic growth, led by China and India, he wrote in the Zions report. Estimates of fourth quarter U.S. growth range between 3.2 percent and 3.8 percent.

In Utah, Thredgold said, job growth has increased "substantially," suggesting a real turn in the economy toward strength.

"There's more vibrancy in the street. . . . We're doing well," he said. "The outlook for next year is good for Utah, and for the region. All of the states in the region are doing substantially better."

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E-mail: jnii@desnews.com