Utah's index of economic indicators increased sharply during the first nine months of 1988, suggesting further economic expansion next year, an economist says.

The September index, which combines nine indicators of Utah growth, continued its pattern of month-to-month volatility but still increased by 4.5 percent above September 1987, said Kelly K. Matthews, corporate economist for First Security Corp."The gain reflects real economic expansion, as the impact of inflation and seasonal factors has been removed," he said in a report released Tuesday. "The underlying growth trend through the first three quarters of the year points to sustained economic expansion in 1989."

The indicators include new automobile loans, the consumer loan delinquency rate, initial claims for unemployment and valuation for non-residential construction permits.

The index also takes into consideration new dwelling unit permits, manufacturing workweek hours, non-agricultural job placements, new automobile sales and new Utah corporations.