Reaching its highest point since last September, a monthly economic index jumped to 52.6 — an indication that Utah's economy might be on an upswing.
The Business Conditions Index for the Mountain States region — a leading economic indicator for Colorado, Utah and Wyoming — rose above growth-neutral of 50.0 to 51.5 in July, with Utah leading the three.
The index report was released Monday by the Goss Institute for Economic Research. It is based on a survey of supply managers in the state. The index evaluates business conditions from the viewpoint of the Utah small-business owner or manager. It uses a range of zero to 100, with a lower index number meaning less-favorable conditions for Utah's small businesses.
Utah's index grew from June's 40.3. Components of the overall index for July were new orders at 67.9, production at 66.7, delivery lead time at 47.0, inventories at 43.4 and employment at 38.3.
"I expect the state's seasonally adjusted unemployment rate to peak at 6.0 percent, its highest level since 1987, in the fourth quarter of this year," Ernie Goss, the institute's director, said in a prepared statement in the index report. "Although Utah will continue to lose manufacturing jobs, both durable and nondurable, in the months ahead, the pace of these losses will diminish significantly from the rate experienced earlier this year."
The estimated peak would increase Utah's unemployment rate from last month's 5.7 percent, according to figures from the state Department of Workforce Services. The rate is still lower than the institute's estimated peaks for Colorado at 8.2 percent and Wyoming at 6.5 percent.
"This month, business buyers were asked whether they expected more layoffs for their firms for the rest of 2009," Goss said. "Almost 48 percent expect more layoffs in the remainder of 2009."
However, the region's economic optimism, as portrayed by the confidence index, remained high at 66.7 percent, a small dip from June's 67.9.
"Very low interest rates, both short-term and long-term, a stabilizing housing market and aggressive federal economic policy have clearly lifted the economic outlook of supply managers in the Mountain States region, while at the same time they have contributed to upward pressures on prices," Goss said.