Business conditions in the Beehive State continue to roll ahead of the rest of the nation, despite some slowing, according to a survey released Wednesday.

Utah's Business Conditions Index dipped slightly to 65.6 from September's 66.5 and August's 70.6. Prepared by Creighton University in Omaha, Neb., the report is based on a combined survey of local supply managers and business leaders in Utah, Wyoming and Colorado.

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.

Creighton economics professor Ernie Goss seemed unfazed by the state's decline.

"Utah's economy continues to expand at rates not experienced since the go-go 1990s," Goss wrote in Wednesday's report.

He noted that durable and nondurable goods producers surveyed for the index, except for those in food processing, reported upturns in business activity for the month, and that commercial construction in the state remains brisk.

For the three-state region, the index fell for the second straight month to 67.6 from September's 73.3 and August's 75.6. Colorado's index fell to 53.8 from September's 65.8, while Wyoming's reading declined to 81.4 from September's 83.8.

By comparison, the Arizona-based ISM said Wednesday that its national manufacturing index registered 51.2 in October. That compares with 52.9 in September and is the lowest since June 2003. October's decline reflected weakness at companies that supply the beleaguered auto and housing industries.

And in a separate report, the U.S. Commerce Department said spending on construction projects dropped by 0.3 percent to a seasonally adjusted annual rate of $1.196 trillion in September. Housing activity fell for a sixth straight month.

"It now seems clear that the U.S. factory sector is straining under the weight of declining auto production and a deteriorating housing market," said Bart Melek, an economist at BMO Capital Markets.

The reports sent stock markets down, with the Dow Jones industrial average falling 49.71, or 0.41 percent, to 12,031.02. The Standard & Poor's 500 index fell 10.13, or 0.74 percent, to 1,367.81, and the Nasdaq composite index fell 32.36, or 1.37 percent, to 2,334.35.

Analysts said manufacturing, which had strong growth in recent years after the 2001 recession, probably would slow sharply in the coming months, reflecting the overall sluggish economy.

"The manufacturing malaise is gathering steam, and the troubles in the vehicle sector point to further problems ahead," said Joel Naroff, chief economist at Naroff Economic Advisers.

The weakness in housing was partially offset by a 0.1 percent rise in spending on nonresidential private building projects. They hit an all-time high of $312.7 billion at a seasonally adjusted annual rate — sparked by increases in hotels, office buildings and the category that includes shopping centers.

---

E-mail: jnii@desnews.com