Zions report is bullish on 2010

Things are looking up for Utah's small businesses, which will benefit from stronger national economic growth in early 2010, according to a monthly gauge released Tuesday by Zions Bank.

"The Great Recession is over!" declared the Zions Bank Small Business Index for Utah, which was 80.2 in December 2009, up from a revised 79.0 in November. Economists have said Utah's recovery relies heavily on economic growth nationally and globally, which is happening.

The index views the state's economy through the lens of its small-business owners and managers, using a 100-point scale with conditions in 1997 as its baseline.

Utah's December unemployment rate was estimated at 6.3 percent, a slight improvement from November's 6.5 percent rate. Utah lost 38,800 jobs in the last 12 months, but it is well below the national unemployment rate of 10 percent.

From the index viewpoint, higher unemployment is good, because it means small businesses have access to a selection of laborers. But the severity of the recent job losses, tied to lower incomes and retail spending, have had a negative impact on the index.

The index noted that the national economy grew at a 2.2 percent after-inflation rate during the third quarter of 2009. The final quarter is expected to show a 4 percent to 5 percent growth rate. But forecasts for the first half of 2010 vary widely, with experts divided on whether growth will be stronger or weaker.

The index report, prepared by Jeff Thredgold of Thredgold Economic Associates, says the National Bureau of Economic Research Business Cycle Dating Committee is likely to say the recession, which began in December 2007, officially ended near mid-year 2009. That makes it the "longest, deepest, most painful and most pervasive" recession since the Great Depression. The two most recent recessions each lasted only eight months.

The national net loss of 7.2 million jobs in 2008 and 2009 "is a painful contrast to the average gain of 1.9 million new net jobs" between 2005 and 2007, Thredgold said.

"Modest job gains and occasional losses could be reported in coming months as the U.S. economy continues to emerge" from the recession, he added.

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