Problems with exports and foreign competition are squeezing manufacturers in Utah, according to one industry analyst.
In addition, manufacturers throughout the Mountain West continue to have problems finding qualified workers, says Ernie Goss, a Creighton University professor who compiles the Mountain States Business Conditions Index.Goss said manufacturing of durable and non-durable goods has "slowed dramatically" in Utah due to export problems and international competition.
"For example, if you're exporting electrical and electronic components to Asia, because the dollar is high, it makes your product more expensive in international markets. The demand also has dropped and some of these economies are having problems, particularly Thailand and Korea. They're buying less of our products," Goss said.
Utah is a "fairly high-tech state" and has closer international business ties than many other states, so this affects a relatively large portion of the state's manufacturing employment, Goss said.
At the same time, the service sector remains strong in Utah.
Also, most of the weaknesses seem to be occurring outside the Salt Lake City/Ogden area, which is doing well, Goss said.
Utah's overall index was 44.3 in December. An index figure of more than 50 shows an expansionary economy.
Utah is not alone: the overall index for the Mountain States overall was 42.3, which is the lowest it has been in two years. Goss examines the combined and individual economies in Utah, Colorado and Wyoming on a monthly basis by surveying purchasing managers.
Utah's December index was better than Colorado's (34.8) but worse than Wyoming's (54.6).
"Finding and hiring qualified workers in the region continues to have a negative impact on regional manufacturers," Goss said.
Goss gets his information from purchasing managers for both this and other surveys he conducts. The National Association of Purchasing Management began polling its members about business conditions in 1931. Goss uses the same methodology in his surveys as the national survey.
The National Association of Purchasing Management said its December index of business activity was 45.1, down from the November level of 46.8.
On the national level, the association reported Monday that manufacturing dropped in December to the lowest level it has been in nearly eight years. December also was the seventh month in a row in which the index was below 50 percent.
However, experts were not surprised because they anticipated the United States's economy will cool somewhat this year.