The Mountain States region is showing signs that it could beat a double dip recession, according to the September report of the Goss Institute for Economic Research.
But the business confidence index has slumped to a recessionary level, according to the report. And there are some economic indicators that are not looking great. For example, 28 percent of supply managers surveyed for this month’s report said they expect layoffs in the months ahead, with 72 percent anticipating flat or positive growth. In December 2010, only 7 percent anticipated layoffs.
“Clearly the job outlook has deteriorated even in this part of the country,” said Ernie Goss, director of the Goss Institute for Economic Research.
In Colorado, the state’s leading economic indicator dipped slightly for September. The overall index, termed the Business Conditions Index, for September declined to 51.9 from 53.8 in August.
“Manufacturing employment has expanded at a solid pace over the past year,” Goss said. “Likewise, firms have increased the hours worked for current employees. Our surveys point to continued economic expansion in the state for the rest of 2011.”
For the 23rd straight month, the overall index for the three-state area of Colorado, Utah and Wyoming, advanced to 57.8 from 56.8 in August. An index of 50 is considered growth neutral and the overall index, or Business Conditions Index, is a mathematical average of indicators such as new orders, production or sales, employment, inventories and delivery lead time.
Supply managers in the three-state region added to inventories of raw materials and supplies for the month, which remains an important growth factor, Goss said. Other components of the September Business Conditions Index were new orders at 60.5, down slightly from 60.6 in August; production or sales at 60.7, up from 58.9; and delivery lead time at 56.7, up from 51.3 in August.
“National data indicate that the U.S. economy is teetering on an economic recession,” said “On the other hand, the Mountain States region continues to expand with little evidence of an impending recession. Businesses with close ties to agriculture and energy continue to expand and add jobs at a healthy pace.”
In the Mountain States, the September employment index slipped to a still healthy 56.4 from August’s 57.6 and July’s 56.2, Goss said.
“While job growth in the U.S. has been virtually nil over the past several months, firms in the Mountain States region continue to add jobs at a healthy pace according to our surveys,” said Goss.
Looking ahead six months, economic optimism, captured by the confidence index, slumped to 42 from 44.5 in August and 50 in July.
“It is clear that the economic uncertainty engulfing Europe and the U.S. have dampened the economic outlook of supply managers in the region. Even though the regional economy continues to grow, supply managers remain concerned about the likely impact of a U.S. recession,” said Goss.
October survey results will be released on November 1.