Business conditions called healthy in Utah
The Utah Business Conditions Index, based on a survey of supply managers and business leaders, rose to 68.2 from 65.4 in May and 67.7 in April.
"Except for publishing firms, June growth was very healthy across industries in (Utah) with computer- and electronic-component manufacturing leading the way," Ernie Goss, an economics professor at Creighton and director of its Economic Forecasting Group, said in a prepared statement.
The index ranges from zero to 100, with a figure over 50 indicating an expansionary economy over the next three to six months.
The Creighton group's survey uses the same methodology as the Institute for Supply Management's national survey to gauge business conditions.
The institute on Monday reported that its manufacturing index rose to 56 in June. The reading marked the fifth consecutive month of growth. The reading was above the May reading of 55 and higher than the market expectation of 55.4.
The overall index for the three-state region of Utah, Colorado and Wyoming was 61.2, down from 65.3 in May and 75.3 in April, Goss reported.
"Previous vigorous job growth in Colorado and Wyoming cooled significantly in June," said Goss. "On the other hand, Utah's employment growth continued at its brisk pace."
While Goss expects a slowdown in job growth for the three-state region in the next several months, he said "it will still outpace the nation by a healthy margin."
The Colorado Business Conditions Index indicated healthy, but slowed, growth for the next several months, according to the Goss. It was down to 56.6 in June from 64.9 in May.
Wyoming's index rose slightly to 68.6 in June from 67.6 in May, according to the survey. "Despite the solid report for the month, firms in the state detailed much slower job growth compared to previous months," Goss said.
On the national front, new orders, production and employment powered growth, while inventories continued contraction.
Prices for raw materials — including aluminum, chemicals, gasoline and steel — continued rising, although at a more moderate pace than the previous month. The index for prices paid was 68 in June, down from 71 in May.
"It remains elevated, but it's not raising red flags," said Ryan Sweet, an economist with Moody's Economy.com.
Investors worried about inflation were closely watching for a spike in the prices manufacturers paid for raw materials. Federal Reserve officials say the biggest risk to the economy is if inflation fails to recede.
While the moderation in the latest prices paid index was encouraging, analysts say a trend hasn't been established that costs are under control.
The top performing industries in June were petroleum and coal products; chemical products; plastics and rubber products; food, beverage and tobacco products; nonmetallic mineral products; computer and electronic products; paper products; fabricated metal products; primary metals; miscellaneous manufacturing; textile mills; and machinery.
"Following a weak first quarter, the manufacturing sector rebounded in a strong fashion during the second quarter," said Norbert J. Ore, chair of ISM's survey committee.
E-mail: bcaballero@desnews.com
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