Goss: Economy in mountain states looking up for 2012
March 6, 2012
February’s economy was strong among mountain states said the Colorado-based, bi-partisan think tank Goss Institute for Economic Study in a recently released report. For the 28th consecutive month, the Overall Index for the Mountain States region, which is a leading economic indicator for the three-state area of Colorado, Utah and Wyoming, advanced above growth neutral 50.0. From January to February, the economy is already off to a good start for 2012, a trend the Goss report expects to continue.
Nationally, the index has risen above neutral growth for 30 consecutive months although the rate lags behind regional growth, a fact the Goss Institute attributes to the region’s large energy sector, exports and agriculture.
"Even though growth has been especially strong for firms tied to energy and agriculture, our surveys indicate that growth has spilled over into a broad range of industries across the region," said Goss Institute for Economic Research Director Dr. Ernie Goss. "… Surveys of supply managers in the region point to healthy job growth for the first half of 2012."
In the mountain region, February advanced to a rate of 62.8 on the institute’s Overall Index, up from 61.3 on the index in January. The Overall Index, or Business Conditions Index, ranges between 0 and 100, where an index of 50.0 is considered growth neutral and the index is complied using a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time.
"On a local short-term basis, any indicators that show Utah is strong economically you expect that to trickle down, even if it’s just a staycation or something," said Jonathon Weidenhammer, the economic development director for Park City. "And the longer the economy is doing well, the more we could expect funding into things like the tourism budget."
In Utah, the state’s overall index remained above growth neutral 50.0. Based on the monthly survey of the membership of ISM-Utah, the overall index climbed to 62.6, up from 61.3 in January. Components of the Business Conditions Index for February in Utah were new orders at 62.6, production or sales at 65.4, delivery lead time at 63.0, inventories at 65.5, and employment at 59.1.
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"Durable and non-durable goods manufacturers reported very healthy growth for the month," Goss said. "Growth was particularly strong for firms engaged in international sales."
Employment in the region was also up from January to February. The February employment index increased to 61.2 from January’s 57.2, a figure the Goss Institute already considers healthy.
"This month we asked supply managers to assess layoff expectations for 2012," Goss said. "Only five percent of respondents expect layoffs for 2012. This is down significantly from last year when we asked this same question. The labor market in the three-state region is clearly improving, with job opportunities expanding in both manufacturing and non-manufacturing sectors."
Alongside anticipated job growth, Goss reported that business confidence was also looking brighter region-wide. In surveys asking businesses to look six months ahead, economic optimism, as captured by the February business confidence index, advanced from January’s 57.8 to 58.3 in February.
"Despite higher energy and commodity prices, recent positive economic data on the national front have had clear and positive impacts on supply managers’ outlook," Goss said.