From Deseret News archives:
Business in Utah is booming
The business conditions index for Utah's manufacturing sector climbed to 61.6 from April's healthy 59.4, according to a report from Creighton University in Omaha, Neb. The Creighton study is based on a monthly survey of local supply managers and business leaders.
The 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, a private research group that surveys purchasing and supply executives in more than 350 industrial companies nationwide.
"Utah is recording some of the strongest growth in the nation, with unemployment dipping to its lowest level since 2000," Ernie Goss, Creighton economics professor, wrote in the regional report. "Even the state's information industry recorded strong growth for May."
Weaker results for the month were reported by the state's non-durable goods manufacturers, including food processors, Goss said.
In a separate report released Thursday, the ISM said that its national manufacturing index registered 54.4 in May, down from 57.3 the month before and below the 56.5 reading that analysts had anticipated.
Norbert J. Ore, chairman of the ISM's survey committee, said the slower manufacturing growth reflected "a significant loss of momentum in the last four months as the new orders index has slipped."
Rising prices, driven by increases in raw materials, remain a concern, Ore said. The price index soared to 77 in May from 71.5 in April, for the highest reading since the price index hit 78 last September.
Ore said it appeared to be reflecting the volatility in energy prices. He added: "I also think we're at the point in the cycle where commodity prices are holding up . . . copper, steel, chemicals . . . so there are a number of basic commodity industries where sellers have significant pricing power."
The ISM index measuring new orders was 53.7 in May, down from 57.6 in April and off significantly from the 61.9 reading of February. The production index weakened to 57.2 in May from 60.4 the previous month, while the inventories index fell to 48 in May from 51.3 in April.
David Huether, chief economist with the National Association of Manufacturers in Washington, D.C., said the softening of the overall index and weakening of the production gauge were consistent with forecasts of slower economic growth.
"The outlook we have for the economy is to decelerate through the year," Huether said, adding that he expected the manufacturing index to remain around 54 to 55.
The Creighton report, which surveys manufacturers and business leaders in Utah, Colorado and Wyoming, found the overall business conditions index for the region down slightly to 65.8 from April's 67.7. Colorado's overall index was 63.5, down from April's 68.0 and March's 80.6, while Wyoming rode a steep decline to 74.8 from April's 81.1 and March's 82.1.
Still, Goss remained bullish — about the region, at least.
"The Mountain States region, with a large mining, resource and extraction sector, has experienced economic and job expansion at a rate greatly exceeding that of the rest of the nation," Goss wrote. "I expect this growth gap to remain through the second quarter of this year."
E-mail: jnii@desnews.com
