Utah small-business index holds steady

The current state of the Utah economy has put small businesses in a quandary, according to a local economic expert.

The Zions Bank Small Business Index for Utah, released Tuesday, was 65.7 during June. That was up from a revised 65.4 in May 2009, which was one of the lowest figures in the 19-year history of the index.

While rising unemployment would typically mean a better selection of possible workers for small-business owners, the struggling economy has forced many potential customers to cut back on the amount of money they can spend, said Zions Bank economic consultant Jeff Thredgold, the report's author.

"The problem (for small businesses) in a very weak economy is there are fewer customers walking through the door," he told the Deseret News.

"Two years ago, (companies) had all this business walking in the door and (they) couldn't find enough people to take care of them," he said. "Now, (they) can find all the people they want to hire … but the business side is down."

The index measures business conditions from the viewpoint of the Utah small-business owner or manager. A higher figure is associated with more-favorable business conditions for Utah's small businesses.

The index uses 100.0 for calendar year 1997 as its base year, and it also includes revisions to various historical and new forecast components as they become available, Thredgold noted.

The Utah unemployment rate is the most heavily weighted component of the index. The jobless rate was estimated at 5.4 percent in June, up from 5.2 percent in May, the Zions report said.

The 5.4 percent unemployment rate compares with 3.3 percent during the same month one year ago, the report said. A higher Utah unemployment rate is a positive contributor to the index, because it implies increased access to Utah labor.

Thredgold said that as the national economy begins to stabilize, the residual effects would eventually be felt in Utah. He said that signs in the stock market and other economic indicators have led analysts, like himself, to believe that growth could come as soon as the end of the year.

"We've been in the U.S. recession for 19 months, the longest one ever," Thredgold said. "But there is some light at the end of the tunnel."

E-MAIL: jlee@desnews.com