A measure of optimism among Colorado business leaders has retreated heading into the fourth quarter in part as a result of uncertainty over the presidential election.
The Leeds Business Confidence Index continues to reflect more positive than negative responses, though, and is expected to increase for the first quarter of 2017.
The index slipped to 53 for the fourth quarter, down 1.6 points from the third quarter and a half point from this time last year.
The Leeds School of Business at the University of Colorado at Boulder calculates the index based on the results of quarterly surveys of 270 business leaders from across the state and a variety of industries. Readings above 50 reflect positive expectations. With the exception of the outlook for the national economy, the latest readings represent 21 consecutive quarters above 50.
Richard Wobbekind, executive director of the business research division at the Leeds School of Business, said fourth-quarter results reflect uncertainty over the presidential election. “The candidates support different policies and maybe even approaches beyond policies. So the business community seems to be taking a wait-and-see approach.”
For the fourth quarter, readings topped 50 for five of the six metrics the index tracks.
Confidence in the state economy edged up a tenth of a point to 57.5. Nearly 42 percent of business leaders responding to the survey upon which the index was based expect a moderate or strong increase in the economy. About 45 percent of leaders said they anticipate no change, while 13 percent predicted a moderate or strong decrease.
Gross domestic product, the broad measure of goods and services produced in a given area, grew at an annual rate of 3 percent during the first quarter in Colorado, the fourth-fastest rate nationally.
Confidence in the United States economy rose a point, but at 48.2 remains below 50. While about 24 percent of business leaders said they expect a moderate or strong increase, nearly 46 percent anticipate no change and more than 30 percent forecast a moderate or strong decrease.
National GDP grew at an annual rate of 1.1 percent in the second quarter after increasing eight-tenths of a percent in the first quarter.
The reading for hiring in Colorado edged down two-tenths of a point to 53.2 percent. Nearly 29 percent of leaders said they expect moderate to strong increases in hiring, while more than 55 percent anticipate no change and more than 16 percent predicted decreases.
The statewide seasonally adjusted unemployment rate held steady at 3.8 percent in August, the latest month for which estimates are available. Over the past year, nonfarm payrolls have increased 71,600, with the largest gains in the construction, leisure and hospitality and education and health services sector.
In Mesa County, the seasonally unadjusted jobless rate dropped seven-tenths to 5.3 percent in August. But the jobless rate in Mesa County has remained above other areas of Colorado even as employment growth has lagged behind. Over the past year, Mesa County payrolls have grown 722, or about 1 percent.
The reading for capital expenditures fell 2.7 points to 51.7. While 53 percent of leaders said they expect no changes in spending, nearly 27 percent forecast increases and more than 20 percent predicted decreases.
The reading for sales declined 3.3 points to 55.3 with about 39 percent of leaders anticipating increases, nearly 42 percent expecting no change and almost 19 percent forecasting decreases.
The reading for profits fell 4.7 points to 52.2 with more than 48 percent of leaders anticipating no changes, more than 30 percent forecasting increases and 21.5 percent expecting decreases.
In addition to uncertainty over the election, Colorado business leaders also expressed concerns about government regulations and a shortage of skilled workers.