Diana Cochran Blog

's monthly yardstick of small-business conditions in Colorado declined in April from the previous month, but the bank's corporate economist says there's some good news behind the numbers.
The Vectra Bank Colorado Small Business Index was 76.9 in April, down from a revised 78.1 in March but up from February's revised 74.4.
Nationwide, Vectra's Small Business Index fell to 59.9 in April, from a revised 60.9 in March.
The index measures business conditions from the viewpoint of the small-business owner or manager. The lower the index number, the less favorable conditions are deemed to be for small business. The index is based on a 100.0 rating for 1997.
"April's decline in the SBI is reflective of the current challenges in Colorado's job market," Jeff Thredgold, Vectra's corporate economist, said in a statement.
But Thredgold added that, "at the national level, many signs are emerging that indicate the current recession may be over by the end of the summer. Unfortunately, even after the U.S. recession technically ends, job growth will probably not return to Colorado until next year. But after months of almost nothing but bad news, a bit of good news should be a welcome change for Colorado consumers and small businesses."
Thredgold said recent data "had numerous elements of optimism as to where the U.S. economy goes from here. The overall message is that this painful and extended recession has about run its course, with a return to positive if modest U.S. economic growth expected by late summer."
He noted that consumer spending, representing 70 percent of all U.S. economic activity, "rose at a 2.2 percent annual rate during the first quarter, after declining sharply during the two prior quarters."
He also foresees a rise in overall government spending later this year via the $787 billion stimulus program, boosting economic growth.
"The consensus of forecasting economists sees a roughly 2.0 percent real annual rate of decline [in the nation's gross domestic product] during the current quarter, with a return to slightly positive growth during the third quarter," Thredgold said. "U.S. economic growth is expected to strengthen during 2009’s final quarter, as well as throughout 2010."
He said a return to U.S. economic growth would lead to improving business conditions for Colorado’s small businesses.
Colorado's high unemployment rate — 7.5 percent in March, the most recent month available — is a "plus" for the Vectra small-business index because it suggests greater access to labor for small businesses, Thredgold said. Employment is the biggest single factor in the Vectra index.
Vectra Bank is a unit of Salt Lake City-based .

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