A monthly index tracking economic conditions for small businesses in Colorado continues to rise as prospects for recovery in the state improve.
Weaker economic growth nationally ultimately could affect small firms in Colorado, however.
For now, Jeff Thredgold said he’s cautiously optimistic. “Colorado continues its transition from painful recession to modest growth, a shift that will become more evident this year,” said Thredgold, a corporate economist who calculates the Vectra Bank Colorado Small Business Index.
The index advanced another point in July to 99.5. With increases in each of the last 10 months, the index has climbed to its highest level since December 2006. At this time last year, the index stood at 78.1.
The index tracks economic conditions from the perspective of a small business owner or manager. Higher readers are associated with generally more favorable conditions.
The statewide seasonally adjusted unemployment rate, the most heavily weighted of 14 components of the index, remained unchanged at 8 percent in June, the month for which the July index is based.
At the same time, the pace of job losses has slowed. For the 12-month period ending in June, nonfarm payrolls declined by 32,400. That compared to a revised loss of 46,300 jobs in the previous year-over-year period.
While Thredgold expects economic conditions in Colorado to improve, weaker U.S. growth could affect small businesses in the state. The Vectra Bank U.S. Small Business Index slipped eight-tenths to 101.7 in July.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 2.4 percent during the second quarter, slightly less than expected, Thredgold said. Moreover, revisions to economic data over the past three years revealed that the recession that began in December 2007 was worse than previously thought.
Nationwide, nonfarm payrolls fell an estimated 131,000 in July as the layoffs of temporary government workers hired to conduct the census more than offset gains in other industry sectors.