Lag in economic growth hurts Utah's small businesses

SALT LAKE CITY — The slowdown in the nation's economic recovery "will place a damper" on Utah's small businesses, according to Zions Bank's Small Business Index released Tuesday.

The monthly figures for July show the index for Utah was 106.9 in July, which is down from the revised figure of 107.1 in June.

A lower figure means there are less favorable conditions for Utah's small businesses overall.

"We take 14 different aspects of the economy and condense it all into a single number. We feel the Small Business Index represents all those 14 different measures of how the economy is performing," said Kendall Oliphant, senior vice president of Thredgold Economic Associates, which creates the monthly index and provides consulting services for Zions Bank.

Although the index is geared toward small businesses, "the slowing U.S. economy absolutely would hurt other businesses as well," Oliphant said.

Nationally, the economy lost about 131,000 jobs in July, which was much worse than the anticipated 90,000 jobs.

"The loss of 143,000 temporary Census jobs was the culprit, with private businesses adding 71,000 jobs during the month. June job data was revised to show 96,000 additional lost jobs," according to the report.

For the country, the unemployment rate stood at 9.5 percent, with more than 180,000 people who were ousted or left the work force.

In Utah, the unemployment rate was estimated at 7.2 percent in July, which was down from 7.3 percent in June — but showed an increase over the 6.8 percent rate in July 2009.

That year-over-year lower employment rate is a negative contributor to the index because it suggests there is less access to Utah workers.

Utah's job losses and gains averaged out to an additional 38,000 new jobs emerging each year during the 1994-2000 period and a net loss of 1,300 jobs from 2001 through 2003.

Job increases, which means more income creation and greater retail spending, have a positive impact on Utah's small businesses, and that is also reflected in the index.

e-mail: lindat@desnews.com