An index tracking optimism among Colorado business leaders reflects a less upbeat outlook for the third quarter, but positive expectations nonetheless.
The Leeds Business Confidence Index fell nearly nine points from the second quarter. But at 53.6, the index remains higher than the 10-year average and still signals positive expectations overall.
“While third-quarter data show some waning optimism, the outlook still remains positive,” said Richard Wobbekind, executive director of the Leeds School Business Research Division at the University of Colorado at Boulder.
“Going forward, the European debt crisis, the rate of employment growth and subpar construction activity are still areas of concern for the economy as a whole,” Wobbekind added.
A component of the index measuring prospects for the state economy fell more than 10 points to 56.6 for the third quarter. The outlook for the national economy tumbled more than 16 points to 46, the only reading to fall below 50. Expectations for the state economy have topped the national economy for 29 straight quarters.
While 66 percent of Colorado business leaders responding to the survey upon which the third-quarter index was based believe their businesses are stronger today than a year ago, they cited politics and higher interest rates as the factors that could most affect their businesses.
A component of the index tracking hiring expectations dropped nearly six points to 53.7.
According to estimates from the Colorado Department of Labor and Employment for May, the latest month for which numbers are available, nonfarm payrolls have increased 40,800 over the past year. Professional and business services added 8,900 jobs, while education and health services added 7,800 positions and construction employment rose 7,000.
The information sector lost 3,000 jobs and government payrolls fell 400.
A component of the index tracking expectations for capital investments fell more than six points to 52.6.
Another component tracking sales expectations similarly declined more than six points to 58.1, while the reading for profit expectations fell nearly six points to 54.9.