Small-business index for Utah hits lowest point since 1990

A local gauge of the economy continues to fall, with little hope for a turnaround soon.

The Zions Bank Small Business Index for Utah — a barometer of business conditions from the viewpoint of the Utah small-business owner or manager — slipped to 82.9 in November. That is lower than a revised 83.7 in October and below quarterly levels seen earlier this year and annual figures dating back to 1990.

A lower index figure means less-favorable business conditions for Utah's small businesses. The methodology uses calendar year 1997 as its base.

The index was as high as 123.0 for 2005 but has slipped every year since then. The lowest annual figure since 1990 was 85.5 in 2001. The high since 1990 was 126.4 in 1994.

"The current U.S. recession — likely to be the longest in the post-World War II period — has combined with the global credit crisis to have a major negative impact on Utah's small businesses," Jeff Thredgold of Thredgold Economic Associates and economic consultant to Zions Bank, said in the report, released Tuesday.

The most heavily weighted index component, the Utah unemployment rate, was estimated at 3.5 percent in the latest month, unchanged from the prior month and higher than 2.8 percent at the same point a year ago. A higher Utah unemployment rate is a positive contributor to the index because it implies increased access to Utah labor.

Total Utah employment fell by an estimated 2,200 jobs, or 0.2 percent, during the past year. In the prior year, Utah gained 700 jobs. The 0.2 percent drop is the first 12-month employment loss since the period from July 2002 to July 2003. Job losses have led to lesser income creation and "softer" retail spending, which has hurt Utah small businesses, Thredgold said.

Nationwide, an estimated 533,000 net jobs were lost in November, the worst monthly loss in 34 years, and the unemployment rate climbed to a 15-year high of 6.7 percent.

"The estimated net decline of 1.9 million jobs during 2008's first 11 months is a painful contrast to the average annual gain of 1.9 million net new jobs during 2005 to 2007," Thredgold said. "Such losses are likely to build in coming months as the U.S. economy struggles with likely the worst recession since the Great Depression."