A quarterly index tracking optimism among Colorado business leaders has surged on improved expectations not only for the economy, but also hiring, capital expenditures and particularly sales.
“When we get significant upticks like we saw in this quarter, it really does give us quite a bit of optimism that businesses are seeing overall improvements in the marketplace,” said Richard Wobbekind, executive director of the business research division of the Leeds School of Business at the University of Colorado in Boulder.
The Leeds Business Confidence Index jumped nearly seven points to 58.1 for the second quarter. The index is based on the results of surveys.
Readings above 50 indicate positive expectations. For the second quarter, all of the metrics measured by the index topped 50.
A component of the index tracking confidence in the state economy increased nearly seven points to 62.1, the highest level in a year.
While 32 percent of those responding to the survey upon which the latest index was based remained neutral about the state economy, 55 percent said they expect expansion.
Confidence in the national economy rose more than three points to move into positive territory at 50.4. The outlook was divided nearly equally into the 34 percent of those who remained neutral, the 33.7 percent of those who anticipate expansion and the 31.9 percent of those who were pessimistic.
Confidence in the state economy has topped confidence in the national economy for 32 consecutive quarters.
Survey respondents expressed more concerns about the potential effects of tax policy and consumer confidence than federal spending cuts under sequestration. Many of the respondents said the European debt crises poses no risk to their businesses.
A reading tracking expectations for hiring surged more than eight points to 57.5. While 42 percent of survey respondents remained neutral on hiring, nearly 43 percent said the expect an increasing in hiring.
A reading tracking the outlook for capital expenditures climbed nearly seven points to 56.9. While 41 percent of respondents were neutral, another 41 percent said they anticipated increases in capital expenditures.
A reading tracking expectations for sales shot up almost eight points to 62.3, the highest level for any of the components of the index. More than 58 percent of respondents said they expect sales to increase during the second quarter.
Expectations for profits also increased, pulling up that component of the index almost eight points to 59.4. Nearly 48 percent of survey respondents said they expect growth in profits, while slightly more than 15 percent said they anticipated shrinking profits.