The index has remained in the mid-60s range since September 2003, indicating stable growth in the economy.

The three components of the overall index that lost ground were delivery times, production and purchases, yielding a mixed result in terms of clear direction of the index.

Whatever happens with them we'll see in six months. So if we're doing well in production, it's a good sign.

This confidence in business conditions also is reflected in the survey responses to the annual question regarding anticipated capital equipment expenditures. This year, 62 percent of supply chain managers plan to increase capital equipment expenditure in 2006; only 10 percent said they plan to cut back on capital expenditures. This is a marked difference from previous years, and suggests continued positive economic news for Arizona in the near term.

Holy Katrina! The economy weathered two major hurricanes and in spite of that showed accelerated growth. I think what this shows is that fundamentally the economy was and is in really good shape.

The interesting thing is we've just had negative growth, the economy shrank in the fourth quarter of last year and it doesn't look like it's going to grow much in the first quarter of this year.