An index tracking optimism among Colorado business leaders has slipped, but continues to reflect what’s described as cautious confidence in the state economy.
The Leeds Business Confidence Index edged down three-tenths of a point from the fourth quarter of 2012 to the first quarter of 2013, but at 51.3 signals modest optimism.
“For months, drags on the national economy have included the European debt crisis, the slow rate of employment growth and the resolution of the federal debt crisis. While Colorado business leaders have stronger confidence in the local economy than the national economy, they’re proceeding very cautiously,” said Richard Wobbekind, executive director of the business research division of the Leeds School of Business at the University of Colorado at Boulder.
The Leeds Business Confidence Index is based on the results of quarterly surveys. A reading above 50 indicates positive expectations.
While readings for many components of the index lost ground for the first quarter, most remained above growth-neutral 50. The two exceptions were readings for the national economy and industry hiring plans.
A component of the index tracking confidence in the Colorado economy fell to 55.5 for the first quarter of 2013. While 45.5 percent of business leaders responding to the first quarter survey expect the state economy to expand, about 30 percent remained neutral.
Confidence in the national economy edged up two-tenths to 47, but the proportion of pessimists outnumbered the share of optimists by almost five points.
Confidence in the Colorado economy has topped expectations for the U.S. economy for 30 consecutive quarters and widened to more than eight points in the first quarter.
Gross domestic product, the broad measure of goods and services produced in the country, expanded at an annual rate of 2.7 percent during the third quarter of 2012. Projections for GDP growth from the National Association of Business Economics stand at 2.2 percent for all of 2012 and 2.1 percent for 2013.
A reading tracking business leaders’ expectations for sales for the first quarter rose more than a point to 54.4. While 44.1 percent of leaders responding to the survey expect sales to increase, 31 percent were neutral and 25.2 percent anticipate a decline.
A reading tracking expectations for profits retreated six-tenths of a point to 51.6 with 37.8 percent of respondents anticipating higher profits and 28.8 percent forecasting lower profits.
Expectations for hiring slipped into negative territory at 49.3 with 45 percent of those surveyed neutral and 8 percent anticipating a strong decease in employment.
The reading for capital expenditures remained close to neutral at 50.1.