Colorado business leaders are increasingly confident at the beginning of a new year, but base their outlook more on an improving national economy than conditions in the state.
“We are really seeing businesses reacting more to the national picture in the survey than the state picture,” said Richard Wobbekind, executive director of the research division at the Leeds School of Business at the University of Colorado at Boulder.
The Leeds Business Confidence Index climbed to 59.5 for the first quarter of 2018. That’s three points higher than the fourth quarter of 2017, but eight-tenths of a point lower than the reading for the first quarter of 2017. Readings above 50 reflect more positive than negative responses to quarterly surveys of business leaders from across Colorado and a variety of industries.
For the first quarter of 2018, readings increased for five metrics the index tracks and decreased for one metric. All of the readings remained above 50.
Confidence in the national economy climbed 6.8 points to 58.2 with 46.2 percent of the business leaders responding to the survey forecasting moderate or strong increases in the economy.
Two quarters of growth in gross domestic product, the broad measure of goods and services produced in the country, bolstered confidence, Wobbekind said. So did the anticipation of federal legislation cutting taxes.
At the same time, confidence in the Colorado economy edged down six-tenths of a point to 58.2 with 39.2 percent of survey respondents expecting moderate or strong increases in the economy. While 51.3 percent anticipated no change, 9.6 percent forecast moderate or strong decreases.
“They are a little bit less optimistic about Colorado largely based, I believe, on the lack of a labor force,” Wobbekind said.
Only 15 percent of survey respondents said they’re actively replacing workers with technology, Wobbekind said. But the low unemployment rate could push that proportion upward in 2018.
The statewide seasonally adjusted unemployment rate stood at 2.9 percent in November.
The reading for hiring in the first quarter Leeds Business Confidence Index rose 2.2 points to 59.3 with 45.5 percent of business leaders expecting moderate to strong increases. While 45.8 percent anticipated no change, 8.7 percent forecast moderate to strong decreases.
The reading for sales rose 3.1 points to 61.6 with 55.5 percent of business leaders predicting moderate or strong increases. While 32.5 percent forecast no change, 12.1 percent expected moderate or strong decreases.
The reading for profits advanced three points to 60.6 percent with 54.6 percent of respondents forecasting moderate or strong increases. While 30.4 percent anticipated no change, 15.1 percent expected moderate or strong decreases.
The reading for capital expenditures increased 3.5 points to 59.3 with 44.6 percent of business leaders anticipating moderate or strong increases. While 46.7 percent forecast no change, 8.8 percent expected moderate or strong decreases.