Is index decline good?

When is a slipping business-conditions barometer a good thing?

Apparently when it portends long-term growth.

That's the conclusion of Ernie Goss, a Creighton University economics professor who puts together the Mountain States Business Conditions Index. The index indicated that Utah's 56.4 figure for November — down from October's 65.6 and September's 66.5 — was not cause for alarm.

"Rather than indicating weakness, the sharp decline in the overall index just means Utah's economy is moving to a more sustainable long-term growth path," Goss wrote in his report released Friday. "With the unemployment rate at its lowest level in more than 10 years, it is not surprising that firms in our survey are reporting unfilled positions due to labor shortages."

The index is based on a survey of supply managers and business leaders and uses the same methodology as a national report by the Institute for Supply Management. An index higher than 50 indicates an expansionary economy over the next three to six months.

Meanwhile, the country's manufacturing index slipped for the first time in almost four years, and its fall is firing warning flares for the job market, economists said on Friday. The ISM, based in Tempe, Ariz., said its manufacturing index came in at 49.5 in November, behind October's reading of 51.2.

Components of the overall Utah figure include 55.9 for new orders, production at 56.4, delivery lead time at 56.6, inventories at 56.9 and employment at 56.8.

The three-state Mountain region saw its overall index fall for a third straight month to 58.4 from October's 67.6 and September's 73.3. Colorado's figure rose to 55.6 from October's 53.8. Wyoming's grew to 90.9 from October's 81.4.

"Unemployment rates are low by historical standards throughout the region," Goss wrote. "Despite the labor shortages reported across Utah and Wyoming, I expect job growth in the region to more than double the nation's job growth until the beginning of the second quarter of 2007.

"November job growth in the region was healthy even as labor shortages slowed growth in selected industries and areas in the region. The employment index advanced to a vigorous 75.1 from October's 70.6 from September's 71.1."

As for the national index, industries such as wood, furniture, appliances, fabricated metal and transportation equipment all slipped last month, hit by a housing market slump and bloated automobile inventories.