Colorado business leaders are slightly less optimistic heading into the third quarter, but the latest results of a statewide survey tracking their outlook still reflect more positive than negative expectations.
The Leeds Business Confidence Index fell to 59.7 for the third quarter. That’s down 3.7 points from the second quarter, but up 5.1 points from this time last year.
“Heading into the second half of 2017, the business outlook still remains strong despite reported concerns about Colorado’s talent shortage and infrastructure needs,” said Richard Wobbekind, executive director of the business research division at the Leeds School of Business at the University of Colorado at Boulder.
The index is based on the results of quarterly surveys of business leaders from across the state and a variety of industries — 262 responded to the survey upon which the third quarter index was based.
Readings above 50 reflect positive expectations, and the overall reading of the index has remained above 50 for six straight years.
For the third quarter of 2017, readings dropped for each of six metrics the index tracks, but remained in positive territory.
Confidence in the state economy dropped more than six points to 60.9. While 47.4 percent of business leaders forecast a moderate or strong increase in the economy, 44.7 percent said they expected no change and 8.1 percent said they anticipated moderate or strong decreases.
Confidence in the national economy declined more than nine points to 54.6 with 37.8 percent of business leaders expecting a moderate or strong increase, 38.9 percent anticipating no change and 23.2 percent forecasting a moderate or strong decrease.
The reading for hiring fell two points to 59.7. While 46.6 percent of leaders expected a moderate to strong increase in hiring, 44.3 percent anticipated no change and 9.1 percent predicted a moderate to strong decrease.
Wobbekind said about 25 percent of business leaders reported labor issues among their top challenges, including obstacles to attracting new employees and the high cost of housing. Leaders also cited the need for more investment in infrastructure in Colorado and concerns over uncertainty in politics and the federal government.
In May, the latest month for which estimates are available, the statewide seasonally adjusted unemployment rate remained unchanged at 2.3 percent, the lowest level since the latest statistical series began in 1976. The largest year-over-year payroll gain occurred in the leisure and hospitality sector. The mining and manufacturing sectors both reported losses.
The seasonally unadjusted jobless rate was higher in Mesa County in May at 3.3 percent, although that remains near the lowest level since 2008.
Employment has grown three-tenths of a percent over the past year in Mesa County, the lowest proportional gain of seven metropolitan statistical areas in Colorado. Boulder reported 4.7 percent growth, followed by Fort Collins at 4.1 percent and Greeley at 3 percent.
The index reading for sales fell almost two points to 62.4 for the third quarter. While 58.4 percent of business leaders anticipated moderate or strong increases, 29.4 percent expected no change and 12.2 percent forecast moderate or strong decreases.
The reading for profits fell 1.6 points to 61.2 with 53 percent of leaders expecting moderate or strong increases, 34 percent predicting no change and 13 percent anticipating moderate or strong decreases.
The reading for capital expenditures declined 1.5 points to 59.5 with 45.4 percent of business leaders projecting a moderate or strong increase, 43.9 percent anticipating no change and 10.6 percent forecasting a moderate or strong decrease.