Business conditions best in a year in Utah region

But confidence fell sharply in September in the 3-state area

The Mountain States Business Conditions index soared to its highest level in more than a year, but confidence continued to decline in September.

By Jenifer K. Nii
Deseret News business writer

The index, a monthly poll of supply managers and business leaders in Colorado, Wyoming and Utah, indicated that confidence remained stagnant in September, despite low inflationary pressures and higher production levels. The overall index rose to 54.9, from August’s 52.5. Business confidence, however, dropped to 52.9, down sharply from 58.8 the month before.

The index ranges from 0 to 100. An index greater than 50 indicates expansionary economic conditions.
Ernie Goss, an economics professor at Creighton University in Nebraska, attributed the regionwide drop to continued concern about the economy.
"This indicates that despite what the numbers show for the Mountain States, business leaders and supply managers are concerned about the impact of the weaker U.S. economy on their region," Goss said.

Inflationary pressure for the region remained low, at 55.9. Production rose to 61.8, up from 57.4 the month before. Combining those two results with the new jobs index, which was relatively unchanged at 50, Goss concluded that employers have opted to use overtime hours to meet increased production needs rather than hire new workers.
Recent labor disputes on the West Coast led to a spike in the imports index, which jumped to 50 from 34 in August.
"It appears that supply managers, in order to avert West Coast shipping problems, increased imports in advance of the recent lockout," Goss said.
Exports remained weak at 36.4.

Utah’s overall index broke the growth-neutral 50 for the first time in three months, rising to 53 from 46.7 in August.
"Strength in September new orders and employment, both at 60, offset weaker production at 50," Goss wrote. "At this point in time, Utah’s durable goods manufacturing sector is holding up much better than the non-durable goods manufacturing sector. As in past months, businesses are reporting a pullback in construction activity."

Once again, the two surrounding states last month registered stronger results than Utah. Colorado’s overall index remained healthy at 55.3, though that was down from August’s 60. The index felt downward pressure from a weak employment index at 43.8, which was offset by new orders at 62.5 and production at 68.8.

Wyoming’s overall index rose to 56.9 on the strength of new orders at 66.7 and production at 62.5. Though Goss predicted the state’s economy will continue to grow, he said that it likely will be at a slower pace than last year.

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