Utah business index fell in December

A monthly gauge of Utah's business climate continues to fall.

The Utah Business Conditions Index fell to 38.4 in December, down from 44.4 in November and 46.0 in October.

The index, compiled by the Goss Institute for Economic Research, ranges from zero to 100, with a figure more than 50 indicating an expansionary economy during the next three to six months. Utah's figure is based on a survey of supply managers who belong to the professional association NAPM-Utah.

Components of the overall December figure for Utah include new orders at 38.6, production at 45.7, delivery lead time at 43.5, inventories at 27.8 and employment at 36.5.

"Manufacturers in the state, both durable and nondurable, reported pullbacks in business activity for the month," the institute's director, Ernie Goss, said in a prepared statement. "Over the past six months, the state's seasonally adjusted unemployment rate has jumped by almost 0.5 percent. I expect Utah's jobless rate to climb by another half a percentage point before the end of the first quarter of 2009."

The three-state Mountain States region recorded a record-low index in December, at 41.3. That's down from 46.2 in November and 53.2 in October. Like the Utah index, it is based on a survey of supply managers in the region.

"For the second straight month, the index dipped below growth-neutral," Goss said. "These readings are consistent with a significant economic downturn. This is stacking up to be the Katrina of economic recessions, similar to what the U.S. experienced in the early 1980s, when the national unemployment rate soared above 10 percent. While I expect the downturn for the Mountain States to be a bit less steep than for the U.S., it will nonetheless be deeper than that for 2001."

Colorado's index fell to 41.5 from 44.3 in November and 45.0 in October. Wyoming's slipped to 47.5 from November's 51.4 and October's 73.4.

The Goss Institute uses the same methodology as the Institute for Supply Management, a trade group of purchasing executives. The Institute for Supply Management said Friday that its manufacturing index fell to 32.4 in December, a greater-than-expected decline from November's reading of 36.2. Wall Street economists surveyed by Thomson Reuters had expected the reading to fall to 35.5. The December figure was the lowest in 28 years.

Components of the national index hit historic lows. New orders fell to their lowest level on records going back to 1948. Prices fell as the number of respondents who said they had paid more in December than in November sank to its lowest monthly reading since 1949.

Contributing: Associated Press. E-mail: bwallace@desnews.com