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Show Page 12 The Ogden Valley news Volume XIV Issue XIX July 15, 2007 Slowing New Home Construction Activity Impacting Weber County’s Small Business Sector Highlights • • • • • The Zions Bank Small Business Index for Utah was 105.4 in June 2007, up from a revised 105.2 in May 2007. Utah's unemployment rate was estimated at 2.5% in the latest month, unchanged from the prior month's rate. Total Utah employment is up an estimated 54,000 jobs during the past 12 months. Weber County experienced job growth of 2,700 jobs (2.9%) from a year ago. Joblessness registered 2.5%, down from the 3.1% unemployment rate one year ago. Small businesses within the state that are suppliers for or participants in the singlefamily residential construction sector have seen business activity decline, with some offset by strong commercial real estate activity. The U.S. economy added 132,000 net new jobs in June, while gains in the two prior months were revised higher by 75,000 jobs collectively. The U.S. unemployment rate was unchanged at 4.5%. Home Construction Slows Formerly impressive new single-family home construction activity has slowed within Utah during the past 18 months, tied to constant negative national press about the nation’s housing “bubble,” higher mortgage interest rates, and somewhat tighter lending standards. Given the strong rise in average Utah home prices of the past 12 months, a share of potential homebuyers also no longer qualify to purchase homes. The national media has been constantly raising red flags regarding weak national housing markets. Such weakness is clearly apparent in Arizona, California, Florida, and Nevada. These four states were the location of much of the investor speculation (the flippers) in recent years. The average American home value rose 53.5% during the five-year period ending March 31, 2007. In contrast, average home prices in these four states rose an average of 97.6% during the same five-year period, requiring the current price weakness. By comparison, the average Utah home value rose 48.3% during the fiveyear period. The level of single-family home construction permits is a minor component of the Utah Small Business Index, with lower permit totals leading the Index lower. Utah Employment The Utah unemployment rate-the most heav- ily weighted component of the Zions Bank Small Business Index for Utah-was estimated at 2.5% in the latest month, unchanged from the prior month’s rate, The 2.5% rate compares to a jobless rate of 3.0% during the same month one year ago. A jobless rate of 2.3% in February ranked with the lowest ever recorded in the state and was the lowest in the continental U.S. A higher Utah unemployment rate is a positive contributor to the Index as it implies increased access to Utah labor. Utah’s unemployment rate averaged 2.9% in 2006, 4.3% in 2005, 5.1% in 2004, 5.7% in 2003 and in 2002, and 4.4% in 2001. These rates compare to an average Utah unemployment rate of 3.5% between 1995 and 1999. Total Utah employment rose by an estimated 54,000 jobs (up 4.5%) over the past 12 months. The 4.5% rise is one of the strongest annualized Utah gains in more than 10 years, and is the strongest job growth rate in the nation. This rise compares to a revised gain of 53,200 jobs in the prior year-over-year period. Utah added 55,200 jobs in 2006, 43,700 jobs in 2005, and 30,200 jobs in 2004. These totals compare to gains averaging 38,000 new jobs annually during the 1994-2000 period and a net loss of 1,300 jobs in 2001 through 2003. Stronger job gains, leading to better income creation and stronger retail spending, have a positive impact upon Utah’s small businesses and, therefore, the Index. The Zions Bank Small Business Index for Utah was 105.4 during June 2007, up from a revised 105.2 during May 2007. The Index measures business conditions from the viewpoint of the Utah small business owner or manager. A higher Index number is associated with more favorable business “conditions” for Utah’s small businesses. The Index uses 100.0 for calendar year 1997 as its base year. The Index includes revisions to various historical and new forecast components as they become available. Local Performance Weber County experienced job growth of 2,700 jobs (2.9%) from a year ago. Joblessness registered 2.5%, down from the 3.1% unemployment rate one year ago. Cache County employment grew by 1,600 jobs (3.2%) in the latest 12-month period. The area’s jobless rate was 1.8%, down from the 2.3% rate of one year ago. Davis County payrolls expanded by 4,300 jobs (4.2%) in the past year. The unemployment rate was 2.2% in the latest month, down from 2.8% one year ago. Salt Lake County employment rose by 24,900 jobs (4.3%) over the year. The county’s unemployment rate fell to 2.2% in the latest month, down from 2.9% last year. Utah County employment grew by 9,400 jobs (5.4%) over the last 12 months. The area’s jobless rate was 2.2%, down from the 2.8% rate of one year ago. Washington County payrolls expanded by 2,700 jobs (5.3%) in the past year. The unemployment rate was 2.3% in the latest month, down from 2.8% one year ago. National Employment The U.S. Department of Labor reported a net gain of 132,000 jobs in June 2007, very close to the 125,000 consensus view. Note: reported gains of the two prior months were revised higher by 75,000 jobs. The U.S. unemployment rate was 4.5% in June, matching an identical rate in the two prior months. March’s 4.4% jobless rate matched that of October 2006 as the lowest in more than five years. The average hourly wage rose 0.3% (six cents) to $17.38 hourly, a rise of 3.9% over the past 12 months. Goods-producing employment declined in June, with a net loss of 3,000 jobs. Manufacturing employment fell by 18,000 positions, offset in part by commercial real estate’s construction employment rise of 12,000 jobs. Service-providing employment led the way in June with a rise of 135,000 net new jobs. The education and health services sector added 59,000 net new positions, while the government sector added 40,000 jobs. The leisure and hospitality sector added 39,000 net new jobs. The retail trade sector lost 24,000 positions, while the professional and business services sector lost 9,000 jobs. The U.S. economy added an average of 145,000 net new jobs monthly in 2007’s first six months, down 23% from the 189,000 average monthly pace during 2006. The 2.26 million rise in net new jobs in 2006 roughly matched gains averaging 2.30 million jobs annually in 2004 and 2005. The July 2007 Zions Bank Small Business Index for Utah will be released on August 7, 2007 Zions Bank is Utah’s oldest financial institution. Founded in 1873, Zions has been serving the communities of Utah for more than 130 years. For more information, contact Zions Bank’s Eden office at 745-0835 or log on to <www.zionsbank.com> DARFUR cont. from page 10 state itself.” In the long term, and to avoid further tensions in Darfur, the report urges the creation of “a new entity that can assemble the relevant reports of an impending crisis—from governments, NGOs [nongovernmental organizations], and international agencies—and . . . bring [its findings] to the attention of the international community as a credible and virtually unassailable report.” That entity, as independent as the U.N. inspector-general, might also be authorized to convene the parties to the Convention on the Prevention and Punishment of Genocide to deal with an emerging crisis and take early, preventive action on the basis of the information assembled. While the southern power brokers have, for the most part, put aside their internal conflicts in order to unite against a common northern enemy, if the south is successful in achieving independence, or even if not but a truce is developed between the north and south, what will prevent a rekindling of old southern rivalries for power? An understanding of self-preservation and internal competition for power must be recognized in the politics of the south too. Sadly, like the surviving Jews from the holocaust, or the survivors from the Rwandan travesty, the southern Sudanese have come to learn what has been expressed by Political Scientist John J. Mearsheimer, “The fact of the matter is . . . , states talk a good game when it comes to values, but they actually behave in a very realpolitik, or rather cold and calculating manner when the money is on the table. And what does this tell me? This tells me that if you’re interested in survival in the international system, the best way to survive is to have your own state, and to have lots of power, and not to depend on the international community.” Clearly, as we witness the continuance of death and destruction in the Darfur region of Sudan—even the tragedy that was “never to happen again”—we are reminded that realpolitik is alive and well today, and that to “play ball” or survive in the international community, you had, at the very least, have enough power to carve out your own state, or have a sufficiently powerful political or economic “ace” up your sleeve that can convince other powerbrokers that it is in their best interest to support your efforts to survive. Note: For an electronic copy of Part I or Part II of this three part series, email your request to <slfrancis@att.net> |