An improving national economy boosted small-business conditions in the state last month, according to the Vectra Bank Small Business Index for Colorado.
The index, which looks at several economic variables important to small business, rose in July to 78.2 from 77.7 in June.
A higher reading indicates more favorable conditions on the index, which started at 100 in 1997. The overall U.S. score was 65.5.
“Stronger, or less weak, U.S. economic growth is a positive contributor to the index and will lead to stronger regional and state performance during the next 12 to 18 months,” predicted Vectra Bank economist Jeff Thredgold.
The variable given the greatest weight in the index is the unemployment rate. Higher unemployment is treated as a positive, on the premise that small businesses will find workers more easily and at a lower cost.
But if unemployment gets too high, the ability of consumers to buy the goods and services small businesses offer is diminished.
The state lost an estimated 104,400 jobs in the past year, a more severe decline than the 72,000 jobs lost in 2002 and 2003 during the technology bust.
Thredgold doesn’t forecast that job growth will return to Colorado until 2010.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
