Improving global economy helps Utah small businesses

SALT LAKE CITY — Although it might seem far away for business owners and unemployed workers, the strengthening global economy will assist Utah's small businesses, according to the Small Business Index for September issued Tuesday by Zions Bank.

The Small Business Index was 113.6 last month, which is higher than the 110.6 seen in August.

There also are more people out of work in the state, with an unemployment rate of 7.4 percent for September compared to 7.2 percent for August and higher than the 6.8 percent the same month one year ago.

"A higher Utah unemployment rate is a positive contributor to the index as it implies increased access to Utah labor. Other associated factors typically tied to a higher unemployment rate, such as lesser job creation, lesser income gains and lower retail sales, pull the index lower," the report said.

The global economy has been "on a solid growth pace that will continue to benefit the Utah economy," according to the index report.

"Solid global economic performance enhances the ability of Utah firms to sell goods and services around the globe," the index said. This also will encourage more visitors and tourists from others areas to come to Utah.

Gains in the global economy were led by Asian countries, particularly China and India, and experts anticipate this will continue throughout next year. Financial experts also predict that there will be "positive" economic growth in the United States and Europe, but those improvements will be somewhat behind the advancements of Asian countries.

"The latest estimate of the International Monetary Fund sees global economic growth at 4.8 percent real (after inflation) annual pace in 2010, slowing to a still solid 4.2 percent real annual rate in 2011," the index said.

In the U.S., the Department of Labor noted a net loss of 95,000 jobs in September, which was considerably higher than the 5,000 loss that had been anticipated. Losing 77,000 temporary U.S. Census jobs was the primary reason for the hike.

In addition, state and local governments across the country reduced their payrolls by 83,000 jobs last month, with the teachers comprising the largest number off people laid off.

The private sector in September added 64,000 jobs, which was essentially what financial experts had anticipated.

The national unemployment rate was 9.6 percent in September, which was marginally better than the 9.8 percent of September of last year, but is substantially worse than the 6.2 percent seen in September 2008.

"Roughly 130,000 net new jobs new to be added monthly just to met the needs of a rising population and just to keep the unemployment rate stable," the index said.

e-mail: lindat@desnews.com