Utah business conditions slip slightly

Utah's business conditions slipped in January but remained above a level deemed to be in expansion mode, according to a monthly gauge released Monday.

The Business Conditions Index, compiled by the Goss Institute for Economic Research, was at 52.7 in January, down from December's 55.0.

The index ranges from zero to 100, with a figure over 50 indicating an expansionary economy over the next three to six months. Utah's index is based on a survey of purchasing managers.

Components of Utah's overall figure were new orders at 58.5, production or sales at 60.1, delivery lead time at 42.3, inventories at 57.2 and employment at 45.5.

"Manufacturing in Utah has not improved as significantly as in Colorado," Ernie Goss, director of the institute and the Creighton University Economic Forecasting Group, said in a prepared statement. "Expansions in new orders and production for the month failed to generate job gains for durable and non-durable producers. I do expect job gains in the months ahead, however."

Utah is part of a Mountain States region that saw its index move down to 55.6 in January from December's 59.1. It was 55.4 in November.

Colorado's index in January was 56.2 from December's 62.8. Wyoming's fell to 62.8 from December's 64.4.

The Goss institute uses the same methodology as a national index compiled by the Institute for Supply Management. That organization on Monday said its national index, which it considers a gauge of the manufacturing sector, read 58.4 in January, compared with 54.9 in December.

It was the sixth straight month of expansion and its highest level since 2004. Analysts polled by Thomson Reuters had expected a level of 55.5.

Manufacturing activity has become a pocket of strength in the economy, though some of it flows from temporary factors such as customers needing to add to depleted stockpiles of goods. New orders, a sign of future growth, jumped in January to its highest level since 2004. So did current production. Order backlogs grew, along with prices companies paid. Thirteen of 18 industries said they were expanding, led by the apparel, textile mills and machinery sectors.

China's manufacturing also expanded in January, and the outlook was positive despite government efforts to cool inflation by tightening control over bank lending, two surveys showed Monday.

U.S. manufacturers have been pumping up production to feed their customers' depleted stockpiles. The ISM said manufacturers' inventories contracted at a slower rate in January. Still, their customers' stockpiles fell to an all-time low.