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Show vigorous business conditions predicted for Utah yi.orous business condl-Jopected condl-Jopected to prevail In L J"rin8 the fourth qui,r' " - J .ovordins to the First " purity newsletter re- ' 'jsfJ th'S ssiJ Rit ! : Jjko. nuMRer l,f he Mt Uh. Df- Kfll-V Mns. ? .president nJ economist, Is editor of the newsletter. Nationally, the outlook for the economy over the next six to nine months appears generally sound. Almost no evidence currently available suggests a recessionary economy econ-omy in 1978. Utah's unemployment rate in the fourth quarter will probably drop to 5, with September's 5.2 rate being the lowest reported since November, 1969. Significant employment gains were posted post-ed in construction, mining and manufacturing industries considered basic to a strong U tn li economy. 1977 personal income in Utah is projected at 13.5 above the 1976 level, with real personul income up approximately approxi-mately 7 Real personal income takes into account an annual inflation rate of ap- I proximately 6.5. Utah's steel production is expected to maintain normal levels in the fourth quarter, despite layoffs and plant closings prevalent nationally. Copper production in Utah should be normal in the fourth quarter, and prices may improve modestly over the next six months as excess world inventories are reduced. Increased production in Utah's coal mining industry in the fourth quarter is expected to be near the 17 GAIN recorded in the third quarter. Residential construction activity ac-tivity continued to boom during the third quarter. Seasonal factors will slow the overall magnitude of construction construc-tion activity during the winter season. Volume of real estate sales slipped slightly in October, 1977 compared to previous months. Demand for credit is expected to remain strong in Utah despite the recent rise in interest rates. Measured by income generation, gener-ation, the construction industry indus-try was the fastest growing industrial sector in Utah in 1975-76. All sectors of the Utah economy including agricultural ag-ricultural income, which declined de-clined nationally expanded rapidly in 1976. Wages and salaries increased much faster than property income, i.e., dividends, interest and rent. While important economic indicators retail sales, industrial indus-trial production and unemploymentwere unemploy-mentwere sluggish nationwide nation-wide in the third quarter of 1977, they are read as a transition to a slower growth rate, rather than as signs of impending recession. In the third quarter, short-term short-term interest rates rose generally one percentage point and are now nearly two I percentage points higher than earlier this year. Until recently, recent-ly, most short-term interest rates were below the average inflation rate. The tremendous expansion of credit, shift of funds from short to long-term long-term investments, and rising demand for money are basic factors causing the upward trend in interest rates. The Index of Leading Indicators for the United States, designed to predict trends in the overall economy, rose in August following a three-month period of weakness. weak-ness. The Index correctly identified a slowing economy, but the renewed strength in August was a positive factor. The Index of Leading Indicators for Utah also rose strongly in August following a one-month slippage. Nonfarm job placements and permits for new dwelling units contributed markedly to the August increase. The Utah economy remained remain-ed stable throughout the recent national recession, which bottomed in early 1975, and has since maintained a very strong pace of exppnsion. |