A quarterly measure of confidence among business leaders in Colorado continues to increase, a reflection in part of a state economy that’s outperformed the national economy.
The University of Colorado reported that its Leeds Business Confidence Index edged up two-tenths of a point to 61.2 going into the third quarter. The index is based on the results of surveys of business leaders from across the state and a range of industry sectors. Readings above 50 indicate positive expectations for the coming quarter.
“Panelists’ perceptions of the state economy outperforming the national economy are, in fact, grounded in the reality that the state economy is one of the best economies in the nation,” said Richard Wobbekind, executive director of the business research division at the Leeds School of Business at CU.
With the latest gain, the index has increased for a record 11 consecutive quarters. Survey results were positive for each of six metrics the index tracks.
“Increased confidence coincides with increasing home prices, employment gains, rebounding household income and falling foreclosure rates,” Wobbekind said.
Confidence in the Colorado economy slipped eight-tenths of a point, but remained well into positive territory at 65.9. Nearly
63 percent of business leaders responding to the third-quarter survey said they expect the state economy to expand. Confidence in the national economy held steady at 57.4, with almost 44 percent of business leaders anticipating growth.
While gross domestic product, the broad measure of goods and services, increased at an annual rate of 3.8 percent in Colorado in 2013, GDP grew at 1.9 percent nationally last year and contracted 1 percent during the first quarter of this year.
A component of the index tracking hiring expectations edged down a tenth of a point to 59.5, with nearly 46 percent of business leaders expecting increased staffing and almost 45 percent neutral.
According to the latest estimates, nonfarm payrolls in Colorado have grown 70,500 over the past year. All metropolitan areas in Colorado reported year-over-year employment growth in May, including Grand Junction. However, Grand Junction and Colorado Springs have yet to return to pre-recession employment levels.
The reading for capital expenditures rose a point to 59.6. More than 43 percent of leaders said they expect an increase in capital spending, while more than 46 percent remained neutral.
The reading for sales advanced seventh-tenths of a point to 63.4 with more than 60 percent of those responding to the survey anticipating increased sales. The reading for profits edged down a tenth to 61.2. While nearly 54 percent of business leaders said they expect rising profits, more than 33 percent were neutral.