Businesses get a boost

Strength in the regional economy continues to boost Utah's small businesses, according to the latest report from Zions Bank released Tuesday.

The bank's Small Business Index for Utah was 106.6 in February, up from a revised 105.4 in January.

The index uses 100 for calendar year 1997 as its base and includes revisions to various historical or forecast components as they become available. A higher figure is associated with favorable business conditions.

The February index focused on how the region's economic strength is affecting Utah, according to Jeff Thredgold, economic consultant to Zions Bank and author of the report.

"Utah is not an island unto itself," Thredgold said. "It is part of what is the strongest region in the country, and the strongest region by a wide margin. We've got employment growth for the last 12 months at a 4.1 percent average (for the five-state region of Utah, Idaho, Wyoming, Nevada and Arizona), which is 50 percent stronger than the next five states. So we're benefiting from strong regional growth."

The combination of national economic growth, the region's rebound from relative weakness 5 years ago and pressure from both coasts to find a lower-cost place to do business and live has drawn people to the Intermountain West, Thred- gold said.

"Three years ago, we were the single worst real estate market in the country," Thredgold said. "Now we're number one. What happens to the real estate market in Arizona, in Nevada, in California over time has an impact on us. It makes our real estate more attractive. And when you load in strong job growth and strong net in-migration, then we've brought real estate prices to a more reasonable level. A more expensive level, certainly. But for Utah homeowners, it's a good time."

Utah's issue, as it has been, is its tight labor market, Thredgold said.

"It's the lowest in the country, the 48 contiguous states," he said. "So it's still an issue: Where do you find people to hire? We are slowing down a little bit. ... But still, we're one of the four strongest in the country."

The state's unemployment rate — the most heavily weighted component of the index — was estimated at 2.7 percent in the latest month, up from the prior month's rate. A low Utah unemployment rate is a negative contributor to the index as it implies less access to labor.