Budget Analysts Expect Utah, U.S. to Experience Economic Expansion
Budget analysts expect small businesses operating in Carbon County and across the state to benefit due to anticipated economic growth nationwide.
After stumbling during first quarter 2003, the United States economy should improve throughout the remainder of the year.
U.S. economic growth was miserly in first quarter, inching up at a 1.6 percent real rate, indicated the latest Utah small business index compiled by Zions Bank.
The national expansion level was slightly weaker than initially forecast and basically matched the prior quarter's weak 1.4 percent after inflation growth rate posted nationwide.
First quarter sluggishness was, in part, tied to "the CNN effect," explained the small business index.
Millions of Americans focused more attention on the war with Iraq than on supporting the U.S. business sector.
In addition, severe weather at numerous locations across the nation also crimped consumer spending.
Spending was sluggish in the January-March period, rising 1.4 percent versus a 1.7 percent rate in the prior quarter, continued the small business index.
Housing construction activity remained strong during the quarter, climbing at a 12 percent annual rate.
Spending on non-residential structures like office buildings and factories fell 3.4 percent for the sixth straight quarterly decline.
The drop represents a continuation of the worst slump in fixed investment since the late 1920s, pointed out the small business index.
However, financial analysts expect growth prospects to improve nationwide.
Recent jumps in the two main measures of consumer confidence and sentiment, combined with lower energy costs, bode well for stronger economic expansion in the second half of the year.
The Utah unemployment rate - the most heavily weighted component of the business index - was estimated at 5.3 percent in April 2003, down from March's 5.7 percent rate.
April's statewide joblessness level compares to an unemployment rate of 6.3 percent during 2002. A lower jobless rate is a negative contributor to the index, implying decreased access to Utah labor.
Utah's unemployment rate averaged 6.1 percent in 2002 and 4.4 percent in 2001. By comparison, the 3.2 percent average during 2000 was one of the lowest posted since the early 1950s. The rates compare to an average Utah jobless level of 3.5 percent between 1995 and 1999, noted the index.
Total Utah employment declined by 3,400 jobs, down 0.3 percent during the past 12 months. Employment gains averaged 38,300 jobs statewide annually from 1994 through 2000. period.
Weak job growth or actual employment declines, leading to lesser income creation and weaker retail spending, has a negative impact upon Utah's small businesses, indicated the report.
The index measures conditions from the viewpoint of the Utah small business owner or manager and shows a drop in the state's report to 92.6 in April 2003 from 96.3 in March. A lower index number is associated with less favorable business conditions.
The Utah small business report uses 100.0 for calendar year 1997 as the index base.
At the national level, the U.S. Department of Labor reported the net loss of an estimated 48,000 jobs in April 2003.
The nation experienced a 353,000 job loss in March, while employment opportunities dropped by 120,000 positions in February. The American economy has lost 332,000 jobs in the last 12 months, according to the Utah small business report.
The U.S. unemployment rate registered at 6 percent in April, up from March's 5.8 percent rate and matching December 2002s high for the economic cycle.
The jobless rate could approach 6.2 percent in the coming months, predicted the state's small business index.
The nation's goods-producing sector dropped 73,000 employment positions in April, led by the loss of 95,000 manufacturing jobs.
The U.S. manufacturing sector has posted declining employment for 33 consecutive months, with more than 2.3 million jobs eliminated since mid-2000.
Construction added 18,000 jobs nationwide in April, while the mining sector added 4,000 jobs nationwide.
Service-providing employment in the U.S. rose by an estimated 25,000 jobs in April.
The retail trade sector decreased by an estimated 10,000 positions, bringing the industry's losses to 470,000 jobs since June 2001.
The transportation and public utilities sector lost 19,000 jobs during the month, with nearly all decrease reported in the U.S. airline industry.
The public or government sector added 32,000 jobs nationwide, primarily in local education, while the U.S. health care industry created 13,000 new employment opportunities, concluded the Utah small business index.