Business climate in Utah sunny; nation's is cloudier

Utah's business conditions stayed strong in May, according to an economic report released Wednesday.

But energy prices continued to take their toll on the broader economy, with U.S. manufacturing reporting slower-than-expected growth, the Institute for Supply Management reported.

The Mountain States Business Conditions Index, which surveys supply managers and business leaders in three Western states — Utah, Colorado and Wyoming — found Utah's reading slightly higher in May, at 59.1, up from April's 58.9.

The index ranges from zero to 100, with a figure greater than 50 indicating a growing economy over the next three to six months.

"Utah's economy is growing at a surprisingly strong pace, with only food processors reporting slowing economic conditions," Ernie Goss, a Creighton economics professor and director of the Creighton Economic Forecasting Group, said in a prepared statement. The Creighton group, in Omaha, Neb., prepares the monthly report.

"Even the state's large information industry detailed improving business conditions. Utah is on course to add over 65,000 jobs for 2005, a pace of almost 6 percent growth."

For the three-state region, the index climbed to 70.2, exceeding April's record-high 66.7 and 65.7 in March. Colorado's business conditions dipped to 68.8 in May from April's strong 70.1. Wyoming, on the other hand, saw its third consecutive increase, climbing to 81.1 in May from April's 79.6.

Goss attributed the regional results largely to job growth and the impact of the weaker U.S. dollar on foreign trade.

"The Mountain States region has experienced some of the strongest job growth in the nation for 2005," he wrote. "Based on our monthly survey, this growth will continue for the next three to six months with durable goods manufacturing, transportation and mining enjoying especially strong business growth."

In a similar, nationwide report, the Institute for Supply Management said Wednesday that its manufacturing index stood at 51.4 in May, down from a reading of 53.3 the previous month and below analysts' expectations for a reading of 52. The index is at its lowest level since it was 50.4 in June 2003.

As in the Creighton report, a reading of 50 or above in the index means the manufacturing sector is expanding. The May data indicate the U.S. manufacturing sector is losing momentum, the institute said.

"The data show that the economy has cooled off," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc.

Thayer said that last year, when the economy was stronger, industrial companies pumped up their inventory levels. However, now those companies have enough inventory and are in the process of selling off what they have. That is especially true in the auto sector, Thayer noted.