Utah economy strong

Higher interest rates and rising energy prices could not slow down manufacturing growth in Utah and the Mountain region last month, according to a Creighton University report released Tuesday.

Utah's business conditions index, based on a December survey of supply managers and business leaders, rose to 59.5 from November's 58.3 and October's 56.5, according to the report by Creighton economics professor Ernie Goss.

"Except for food processing, growth was reported across all major industries surveyed in the state for December," Goss wrote in the report.

"Despite a slowing U.S. construction industry, Utah's shows no evidence of waning. Furthermore, the opening, albeit slight, of the Asian market to U.S. beef will be an important economic stimulus to the state's food processing industry."

The Creighton index ranges from zero to 100, with a figure over 50 indicating an expansionary economy over the next three to six months. It uses the same methodology as a national survey conducted by the Institute for Supply Management.

That report, also released Tuesday, showed that national manufacturing grew at a surprisingly slower pace in December.

The Institute for Supply Management said its manufacturing index fell to 54.2 last month from November's 58.1.

"Overall, still quite strong, but a bit disconcerting nonetheless," Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., said in a report about the ISM index. While he does not expect the report to mark the start of a "sustained softening," Shepherdson said another "softish report next month would be worrying."

The index "may not be increasing enough to support job growth" in manufacturing, said Frank Nothaft, chief economist at government-sponsored mortgage company Freddie Mac.

The overall Creighton index for the three Mountain states of Utah, Colorado and Wyoming rose to 65.0 in December from November's 62.5.

"The Mountain States region experienced growth significantly higher than the rest of the nation," Goss wrote. "The region added 53,000 jobs, an annual growth rate of 2.9 percent, in the first half of 2005 but added only 41,000 jobs, an annual growth rate of 2.2 percent, in the second half of the year."

Meanwhile, the Commerce Department reported Tuesday that construction spending hit an all-time high in November amid government spending on school and highway construction as well as sewer systems. Total building activity rose to a record $1.146 trillion at an annual rate in November, up 0.2 percent from the October pace.