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Show Rapid Expansion Of Last Year Should Continue Utah's index of leading indicators surged strongly during the last quarter of 1977. That means the economic pace in Utah in the first half of 1978 should continue the rapid expansion of 1977, says Dr Kelly Matthews, vice president and economist for Fir.st Security Corp. "That and other analytical factors suggest Utahs economj will remain healths and experience favorable progress in 1978. Leading indicators to forecast swings in the business cycle originated with research in the Twenties and Thirties by Columbia University Professor Wesley Clair Mitchell, notes Dr. Matthews. Expand, Contract , Business cycles are recurrent expansions and contractions in business activity. In the past three decades, there have been six recessions and recoveries. Each has varied in duration and intensity. The most recent recession began in November, 1973, in and "bottomed out March, 1975. Since, the U.S. economy has nearly three completed years of growth. As for the derivation indices: Matthews, no like leading indicators existed to deal with the Utah economy. The Utah indicators were built to match the 12 leading indicators used by the Department of Commerce as closely as possible. Certain indicators used in the national index were not available on a state basis. Substitutions had to be made. 10 Items Chosen Ten statistical series were chosen, then combined to develop the Utah index. The 10 are: Consumer spending and attitudes: 8. New direct consumer loans by First Security Bank of Utah. 9. Delinquency rate on consumer loans at First Security Bank of Utah. 10. Number of new automobile sales in Utah. The index has moved up consistently since 1974. But expansion in Utah was exceptionally rapid in 1976 and 1977. During the past year, for example, the index rose 8 6 per cent, double the 4 6 percent expansion for the nationwide index And when the nation was suffering severe recession m 1974 and 1975, the Utah index remained essentially stable Employment: 1. Average weekly hours manufacturing. 2. New non-farjob placements. m 3. Manufacturing rate. Fixed Capital layoff Investments: 4. Value of building permits. 5. Number of building permits for new dwelling units. 6. Number of new incorporations. 7. Net change in commercial and industrial loans for Salt Lake City banks reported by the Federal Reserve. sondjfmamjjasondjfmamjjasond jfmamjjasondjfmamjjasondjfmamjja 1977 1976 1975 1974 1973 Leading indicators show how Utah survivthen ed national recession in More mounted a strong gain in 1974-197- 5, 1976-197- 7. of the same is expected during first half of 1978. Utah indicators were fashioned by First Securitys Dr. Kelly Matthews. of Analysis of thousands of statistical time series m some cases going back to the nud-19tcentury showed certain economic data rose and fell ahead of ups and downs in production, employment and general business activity. Some Reliable Finally a number of series were found to be particularly reliable. These were determined to be forerunners, or indicators, of the business h cycle The tendency of many indicators to move ahead of the economy as a whole is easily understood. For example, it is logical to expect fluctuations in building permits to precede changes in actual output of building. Variations in length of the work week also indicate coming changes in total Thats because manufacturers first react to rising or falling production schedules by lengthening or reducing the number of hours worked are made changes employment, M Jtthews before in total says Dr. Since 1918, the U.S. Department of Commerce has ompiled and published a composite Hidex of 12 leading indicators. These have racked up an especially good record in anticipating the business cycle. Eight-Mont- h Until of Progress This year we celebrate our tenth year of custom steel fabrication for customers throughout the western United States. We value our customers as we see them build the west into a better place to live. Last year, Mark Steels skilled, dedicated and hardworking employees produced more than twelve thousand fabricated tons of steel from our two plants. Approximately 90 of our steel and other supplies come from (Jtah suppliers. We are grateful for their capable service. We are appreciative of all the people who have made our past ten years of service a success. We look forward with anticipation to the next ten years of continued growth and progress. The Salt Lake Warning For the three national recessions in economic activi-t- . since 19(10, the composite index of the 12 leading indicators began to fall an average of eight months before the business cycle peaked. And they turned up an average of three months before the recessionary trough was reached. structed 10 Gear they were con- last year by Dr. 26, 1978 75 West 3rd South, P.O. Box 1 Salt Lake City, Utah Phone (801)521-067- 0 84116 1 6006 29 |
