Conditions worsen for Utah businesses

A Utah small-business gauge continues to dwindle.

The Zions Bank Small Business Index for Utah, released Tuesday, shrank to 69.5 in December, a huge drop since 2005, when the annual figure hit 121.9.

The index, which measures business conditions from the viewpoint of a Utah small-business owner or manager, was 73.7 in November.

The figure dropped in December, despite the index's most heavily weighted component, the Utah unemployment rate, which rose from 3.5 percent to 3.7 percent. The rate was 2.8 percent a year ago. A higher Utah unemployment rate is a positive contributor to the index, because it implies increased access to Utah labor.

"State jobless rates in the Rocky Mountain region have climbed sharply during the past year, directly tied to what could be the longest and most painful recession since the Great Depression," wrote Jeff Thredgold, president of Thredgold Economic Associates, economic consultant to Zions Bank and author of the report.

Utah's total employment is down about 11,500 jobs, or 0.9 percent, from a year ago, he noted. That compares with a loss of only about 3,500 jobs in the prior year-over-year period and represents the largest 12-month employment drop since February 2002 to 2003.

Utah added jobs in 2004 through 2007, with a high of 55,700 added in

2006. "More recently, job losses, leading to lesser income creation and softer retail spending, have a negative impact upon Utah's small businesses, and therefore, the index," Thredgold wrote.

The regional and national jobs picture was even bleaker. The national unemployment rate hit a 16-year high of 7.2 percent in December, compared with a rate of 4.9 percent a year earlier.

"The estimated net decline of 2.6 million jobs during 2008 was the worst year since 1945. The sharp decline was also a painful contrast to the average annual gain of 1.9 million net new jobs during 2005 to 2007. Such losses are likely to build in coming months as the U.S. economy struggles with likely the worst recession since the Great Depression," Thredgold wrote.

The Rocky Mountain region, prompted by U.S. economic weakness, pushed jobless rates in the region sharply higher, and "such jobless rates are likely to move even higher during 2009," he wrote.