Consistent with broader economic growth, Utah's economy continues to strengthen, according to a report released Tuesday by Zions Bank.
The bank's monthly Small Business Index for Utah fell to 103.5 in December from a revised 104.1 in November.
The index measures business conditions from the viewpoint of the Utah small-business owner or manager. A higher index number is associated with more favorable business conditions for Utah's small businesses. The index uses 100.0 for calendar year 1997 as its base.
"Things changed very little," said Jeff Thredgold, economic consultant to Zions Bank. "What we're seeing is basically a continuation of the same. Utah has had a solid bounce back from three years of economic weakness, and though we have kind of plateaued for the moment, the numbers remain solid."
Utah's unemployment rate, the most heavily weighted component of the index, was estimated at 4.6 percent in November (the most recent data available), down from the previous month's revised 4.7 percent. A lower unemployment rate pulls the index down, because it implies that Utah businesses have less access to labor.
Total employment, another factor in the index, rose by about 3.1 percent, or 33,600 jobs, during the past 12 months, Thredgold reported. Job gains have a positive impact on the index, because they generally lead to greater income and retail spending.
Utah's numbers are "consistent with solid U.S. and global economic growth," Thredgold said.
In the Zions report, Thredgold reported that "U.S. economic performance during the 18 months ending on Sept. 30, 2004, was the strongest 18-month performance in 20 years. The global economy recorded solid growth in 2004, with similar expectations for 2005.
"In fact," Thredgold wrote, "2004 and 2005 are likely to be the strongest two-year period for the global economy since the late 1970s."
The U.S. Labor Department reported earlier this month that the national unemployment rate remained unchanged in December, at 5.4 percent. The nation added an estimated 2.2 million net new jobs in 2004.
In addition, Thredgold said, the weakness in the dollar — for the moment, at least — has a positive impact on the Utah and national economies.
"It helps Utah companies sell more products around the world, and it draws more Europeans and the Japanese in particular to our resorts," Thredgold said. "We're seeing a lot of Europeans and Japanese skiing at our resorts, and we'll see a lot of people at our national parks this summer."
Looking ahead, Thredgold said he is also optimistic about Utah's sluggish home appreciation values.
"We have had the single weakest real estate appreciation in the country the last five years," he said. "But we suggest that's going to change. We think you'll see more home price appreciation in the next two to three years than we've seen in the last five."
Homes priced in the "mid-range," at about $250,000, should see the biggest bounce, Thredgold predicted.