For the last two years, the economic indicators for the Western region have advanced above the neutral zone of 50.0 – thanks in no small part to the growth in energy, exports and agriculture.
The Mountain States region includes Colorado, Utah and Wyoming, and that region is performing above the national average, according to the business conditions index produced by the Goss Institute for Economic Research.
In September, economic indicators were still healthy at 57.3 for the region, a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time. It’s the same methodology used by the Institute of Supply Management. an index of 50 represents neutral, or no growth.
“Manufacturing not linked to energy or agriculture experienced much slower growth for the month, said” Dr. Ernie Goss, director of the institute. “Even so, the Mountain States regional economy continues to expand with little evidence of an impending recession. Businesses with close ties to agriculture, energy and exports continue to expand and add jobs at a healthy pace.”
Goss said that, despite the positive news, one-third of supply managers believe the U.S. will move into a recession in 2012. But 48 percent believe the chances of a new recession are 50-50, according to hthe survey.
“Clearly over the past year, recession expectations have risen among supply manages even as the regional economy expands,” Goss said. “While none of the survey participants are in the retail sector, they do depend on holiday buying to support their businesses…overall, only a .6 percent increase is expected. This compares to 2010’s expected growth of 2.1 percent in holiday linked activity.”
October’s employment index slipped, but Goss said the region is adding jobs at roughly four times the rate of the rest of the nation, and the unemployment rate has dipped by two-tenths of a percent over the past three months, Goss said.
In other news, wholesale prices dipped to an inflationary 70.5, he said.
“Recent strength in the U.S. dollar has cooled inflationary pressures over the past several months,” Goss said. “Lower inflation in the pipeline, particularly at the national level, will give the Federal Reserve more flexibility to further stimulate the economy with another QE3 (qualitative easing).”