Colorado business index reflects building momentum
A monthly index tracking business conditions in Colorado has climbed to its highest level in a year, buoyed by growing construction and manufacturing activity.
“The state’s rapidly expanding construction industry is encouraging expansions for a broad range of industries in the state,” said Ernie Goss, director of the Goss Institute for Economic Research in Denver.
Goss calculates the Business Conditions Index for Colorado, Utah and Wyoming based on the results of monthly surveys of supply managers in the three mountain states. Readings range from 0 to 100. Readings above 50 forecast expanding economic conditions over the next three to six months.
In Colorado, the Business Conditions Index rose nearly two points to 60.8 in March. That’s the highest reading since the index stood at 61.4 in March 2012.
“Durable goods producers expanded economic activity at a healthy pace for March even as energy related firms experienced slower growth for the month,” Goss said.
The overall reading for Colorado reflected higher component readings for production or sales at 62.3, but lower readings for new orders at 57.3 and employment at 54.5.
The combined Business Conditions Index for the mountain states rose more than a point to 56.2 in March. The latest reading is the highest since the index stood at 58.6 in October and came in above growth-neutral 50 for a 41st consecutive month.
“Growth among manufacturing firms in the region more than offset slowing economic conditions among energy firms,” Goss said. “Durable goods manufacturers experienced healthy growth in business growth for the month.”
The overall reading for the mountain states reflected higher component readings for new orders at 54.7, production or sales at 56.8 and employment at 57.3. “Very health growth in construction had a significant and positive impact on hiring for a broad range of industries in the region” Goss said. “Durable goods producers added jobs at a healthy pace for March.”
A component of the index tracking confidence among supply managers in the mountain states jumped four points to 53.8. “Improvements in construction and manufacturing along with cooling inflationary pressures are having a positive impact on supply managers’ economic outlook,” Goss said.
Nearly 74 percent of supply managers responding to the survey upon which the March index was based said federal spending cuts have yet to affect their companies, Goss said.
The reading for prices paid, a measure of wholesale inflation, fell more than four points to 67.5. On average, supply managers said they expect their prices to increase 2.1 percent in 2013, about the same as the Consumer Price Index, Goss said.
The reading for inventories of raw materials and supply advanced more than a point to 60.6, signaling growing inventories for a 40th consecutive month. “Healthy inventory growth normally signals that supply managers expect production expansions in the months ahead and is consistent with economic growth and expanding business confidence,” Goss said.
The reading for new export orders rose nearly a point to 54.2, while the reading for imports jumped nearly three points to 57.4.
In Utah, the Business Conditions Index retreated more than a point to 53.3, but continued to forecast economic expansion for the next thee to six months. The overall reading reflected lower component readings for new orders at 46.8 and production or sales at 54.7. The reading for employment rose more than two points to 55.5.
In Wyoming, the Business Conditions Index fell more than a point, but at 58.3 remained above growth-neutral 50 for a 41st consecutive month.
The overall reading reflected a lower component reading for employment at 60.3, but higher readings for new orders at 73.9 and production or sales at 56.4.