In its monthly survey of Mountain States managers and business leaders, Creighton University economists found its overall business conditions index, a leading economic indicator, was up for January. Inflationary pressures also declined slightly, the survey of Utah, Colorado and Wyoming found.
Creighton Economics Professor Ernie Goss said Wednesday that regionally, the overall index rose from 65.0 to a "robust" 71.9 between December and January.
"The overall index declined for four of the last five months of 2005, [but] increases over the past two months point to solid growth into the second quarter of this year," Goss said.
He warned that with oil prices once again approaching $70 per barrel and interest rates rising, these and other factors are likely to blunt growth - especially in the latter half of 2006.
Still, January's regional prices-paid index, which measures inflation at the wholesale level, dipped for a third straight month, to 92.3, down a full point from the previous month. January's score was the lowest since September, tallied just after Hurricane Katrina struck Louisiana and Mississippi.
In Utah, the January business conditions index was strong, but not to the level of the three-state region as a whole. Colorado and Wyoming gained on the Beehive State's yearlong economic growth, with Utah's overall index settling at 59.4, down slightly from December's 59.5 and better than November's 58.3.
Goss noted that "Utah's economic growth has been much stronger than the rest of the nation over the past year."
"Utah began 2006 on a strong note, but on a pace somewhat below that of 2005. Food processors and telecommunications firms reported somewhat weaker economic conditions, while durable goods producers and natural resources-related firms detailed growing economic activity," Goss said.
Returning his gaze to the region as a whole, the professor predicted that inflationary pressures will continue to lighten into spring, though will be offset by higher oil prices and the cumulative impact of the 14 prime interest rate increases ordered by the Fed since June 2004.
The Mountain States' "business confidence" index - a demographic weather vane for regional managers' combined outlook for the period six months ahead - also was high, jumping 7.5 points to an extremely positive 80.8 for January. (An index score below 50.0 equates to a negative outlook).
Goss' optimism was echoed by Jeff Thredgold, a Salt Lake City economist and Zions Bank consultant.
"The Utah economy continues to rank among the nation's strongest, with most signs suggesting solid growth continuing in 2006," he wrote in his recent Utah Economic Outlook Winter 2006. "Such performance is a major departure from the economic weakness that was the Utah norm just a few years ago."
Thredgold also tied Utah economic strength to that of its Rocky Mountain neighbors, noting the region contains four of the nation's top state economies: No. 1 Nevada, No. 2 Arizona, and Utah and Idaho, which have battled for third and fourth over the past 12 months.
Thredgold also noted that substantial snowfall during early December, which resumed in January, has triggered a strong start for Utah's ski industry. He predicted that skier days this winter could top 4 million, breaking records recorded in each of the past two seasons.
Ski Utah also has forecast a banner 2005-2006 season, with business receipts approaching $1 billion, compared with $872 million generated during 2004-2005.
bmims@sltrib.com
