Another month, another tight labor market for Utah businesses.
In its monthly Small Business Index, Zions Bank reported Tuesday that local business conditions continued to be a mixed bag in March — featuring a robust economy, but also a labor pool that seems more like a puddle.
The bank's March index fell to 115.7 from a revised 116.7 in February. The index measures business conditions from the viewpoint of the Utah small-business owner or manager. It uses 100 for calendar year 1997 as its base and includes revisions to various historical or forecast components as they become available. A higher figure is associated with favorable business conditions.
"The economy is still doing extremely well," said Jeff Thredgold, economic consultant to Zions Bank. "We're declining, but declining from a high level."
Utah's unemployment rate, the most heavily weighted component of the index, was estimated at 3.8 percent, down from the prior month's revised 3.9 percent rate, according to the most recent data released by the state. A decline in the unemployment rate is a negative factor in the index, because it implies that small-business owners are facing a tighter labor market, making it harder to find and keep qualified employees.
"The challenge of being fully staffed will be a challenge for both small and large employers," Thredgold said. "When we're talking about 3.8 percent unemployment, with the chance that it'll still go lower, there are not many bodies to hire."
Thredgold said Utah this year may see worker shortages in the construction and trucking industries, in education and health care.
Meanwhile, total employment in Utah was up about 49,300 jobs during the past 12 months, the index noted. That's good news for small businesses — job gains have a positive impact on the index, because they imply greater income creation and increased spending.
"Job growth was just a little bit softer," Thredgold said. "We'd been in the 51,000 to 52,000 year-over-year range in job creation for the last six months, and the latest data was a little softer. Still, at that pace, it's a 4.4 percent growth rate of employment, which still ranks us fourth in the country, behind Nevada, Arizona and Idaho.
"It's a worker's market right now. The strength in negotiations and opportunity is with the worker."
Earlier this month, the U.S. Labor Department reported a net gain of 211,000 jobs in March, beating Wall Street's projected gain by about 20,000 jobs. The nation's unemployment rate fell to 4.7 percent in March, the department reported, from 4.8 percent in February.
E-mail: jnii@desnews.com