For the 38th straight month, the overall index for the Mountain States region, an economic indicator for the three-state area of Colorado, Utah and Wyoming, advanced above growth neutral 50.0.
The December index from a survey of supply managers continues to exceed the national index, which crawled only slightly above growth neutral for December.
The overall index, or Business Conditions Index, which ranges between 0 and 100, fell to a still solid 54.4 from 55.9 in November.
An index greater than 50 indicates an expansionary economy over the course of the next three to six months.
The overall index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time.
“The region’s manufacturing and value-added services industries, such as systems development companies tied to health care, continue to expand,” Goss Institute for Economic Research Director Dr. Ernie Goss said.
Goss also directs Creighton University’s Economic Forecasting Group and is the Jack A. MacAllister Chair in Regional Economics.
“Based on our survey results over the past several months, I expect both overall job and economic growth to continue well into 2013,” said Goss.
The employment index fell below growth neutral for the month.
The hiring gauge slumped to 48.3 from November’s 52.1 and October’s healthier 57.6.
“Durable and non-durable goods manufacturers pulled back on hiring for the month. Moreover, energy firms and firms linked to energy have slowed their pace of hiring,” said Goss.
The prices-paid index, which tracks the cost of raw materials and supplies, dipped to 69.2 from 69.7 in November.
“Even with the cheap money policy of the Federal Reserve, inflationary pressures at the wholesale level are trending downward,” said Goss.
Looking ahead six months, economic optimism, as captured by the business confidence index, climbed to 57.7 from November’s 48.9.
“An improving national economy and upturns in residential housing pushed business confidence higher,” said Goss.
Supply managers in the three-state region added to inventories of raw materials and supplies for the month. The index advanced to 64.2 from November’s 62.4.
“We have recorded inventory growth for 37 straight months. Healthy inventory growth normally signals that supply managers expect production expansions in the months ahead and is consistent with economic growth.”
THIS month supply managers were asked how their firm was dealing with the potential longshoreman strike. Approximately 21.1% of supply managers indicated that the impending strike encouraged their company to advance their purchases of raw materials and supplies.
The new export order reading for the Mountain States region declined to 52.6 from 57.1 in November, while December imports sank to 57.6 from 63.2 in November.
Other components used to calculate the overall index for December were new orders at 49.9, down from 53.9 in November; production or sales at 58.2, off from November’s 60.2; and delivery lead time at 51.5, up from 51.0 in November.
The state’s leading economic indicator, based on a monthly survey of supply managers in the state, moved above growth neutral for December.
The overall index declined to 53.8 for December from November’s 54.9.
Components of the Business Conditions Index for December were new orders at 49.9, production or sales at 50.7, delivery lead time at 50.0, inventories at 64.2, and employment at 50.6.
“The growth of the manufacturing sector, especially for metal producing firms, in the state continues at a healthy pace even as firms tied to the state’s energy sector experienced slower business growth for the month. The state’s construction industry is expanding at a solid pace,” said Goss.
The state’s overall index once again moved above growth neutral 50.0.
Based on the monthly survey of the membership of ISM-Utah, the overall index for December slipped to 54.2 from November’s 57.3.
Components of the Business Conditions Index for December were new orders at 53.6, production or sales at 56.6, delivery lead time at 51.1, inventories at 55.9, and employment at 53.9.
“Durable and non-durable goods producers in the state continue to expand at a healthy pace. Technology firms are adding employment at solid pace. Utah’s economy will expand at a positive but somewhat slower pace over the next 3 to 6 months,” said Goss.
The state’s leading economic indicator from a survey of supply managers in the state has now climbed above growth neutral 50.0 for 38 straight months.
The index declined to a solid 55.5 from November’s 55.9.
Supported by NAPM-Western Wyoming, surveys over the past several months point to positive, but slowing economic growth in the state economy for the next 3 to 6 months.
Components of the overall index for December were new orders at 45.4, production or sales at 55.0, delivery lead time at 60.8, inventories at 69.5, and employment at 46.6.
“Mining firms, and firms tied to mining, are experiencing pullbacks in business activity even as manufacturing firms added jobs at a positive but slow pace. The state will experience slow to no growth for the next 3 to 6 months,” said Goss.