The Zions Bank Small Business Index for Utah fell to 108.1 in January, down from a revised 108.6 in December 2007.
The increase reflected that total Utah employment is up an estimated 44,800 jobs during the past 12 months, according to Zions Bank economic consultant Jeff Thredgold.
A lower index number is associated with less favorable business conditions for Utah's small businesses. The index uses 100.0 for calendar year 1997 as its base year.
Thredgold said though Utah's unemployment rate was up 0.4 percent to 3.2 percent in January, compared with 2.8 percent in November and December, that means more potential employees are available for local small businesses.
"The index is done from the viewpoint of small business owners or managers who are pulling their hair out because they can't find anyone to hire," he said. "An increase in the unemployment rate actually helps the index rise a little bit."
Thredgold said small business owners struggle when the employment rate is higher, because competition increases for filling needed positions.
Utah's addition of 44,800 jobs in the past year is one of the stronger annualized Utah gains in more than 10 years and is the strongest job growth rate in the nation, he said.
According to the Zions report, the U.S. economy lost an estimated 17,000 net jobs in January, with the national unemployment rate moving from a two-year high of 5.0 percent to 4.9 percent.
Utah's 3.2 percent rate compares to a 2.5 percent rate during the same month a year ago. The jobless rate of 2.3 percent in February 2007 ranked with the lowest ever recorded in the state and was the lowest in the continental United States, Thredgold said.
The report said Utah's unemployment rate averaged 2.6 percent in 2007, 2.9 percent in 2006, 4.3 percent in 2005, and 4.9 percent during the period from 2000 to 2004. The average Utah unemployment rate from 1195 to 1999 was 3.5 percent.Thredgold said another important component of the index is small businesses' ability to borrow, so the Federal Reserve Bank's recent 1.25 percent cumulative interest-rate cuts could bode well for small companies. Lower financing costs give businesses better opportunities for growth or expansion.