Business conditions in Utah surged to a “vigorous” level in January, propelled by strong manufacturing activity, according to a report released Wednesday.
The index of overall business conditions in Utah climbed to 61.3 from 59.4 in December, according to the Goss Institute for Economic Research, which cited a survey of Institute of Supply Managers (ISM) members in the state.
“Anything above 60 I would put in the ‘vigorous’ category,” said Ernie Goss, an economist and director of the institute. An index of 50 is considered growth-neutral.
Nationally, manufacturing grew in January at the fastest pace in seven months, on signs of a global pickup from Germany to China. The data released Wednesday helped the Dow Jones industrial average close within 100 points of its post-2008 financial crisis peak.
Factories raised output in January by the most since June, according to the Institute for Supply Management’s manufacturing index.
In the Rocky Mountain region, the combined Colorado-Utah-Wyoming index advanced to 61.3 from 60.2 in December on the strength of Utah’s economy. Wyoming dropped to 61.3 from 63.2, while Colorado fell to 57.5 from 59.6.
The Utah index is at its highest level in at least three years. Its most robust elements were production or sales of manufactured products (69.6), inventory levels (65.2), and new orders (62).
Other elements were delivery lead time (55.4) and employment growth (54.4).
“Manufacturers in the state continue to benefit from an expanding energy sector and international trade,” Goss said in a statement.
Goss expects business conditions in those sectors to remain healthy because the Federal Reserve has promised to keep interest rates at record lows until 2014. That will keep the dollar weak against other currencies and help companies tied to energy, agriculture commodities and exports, he said.
Goss said it will take another two years to regain all the jobs lost in Utah during the recession and sluggish recovery. Employers need to create another 43,000 jobs to return to pre-recession levels, he said.
His prediction is more guarded than some forecasts. Mark Knold, chief economist at the Utah Department of Workforce Services, believes the state could be back to pre-recession job numbers by the end of 2012 if recent employment growth rates hold up.