An index tracking optimism among Colorado business leaders has slipped, but still reflects a cautiously upbeat outlook in the midst of uncertainty.
The Leeds Business Confidence Index slipped two points from the third quarter to the fourth quarter, but at 51.6 continues to signal positive expectations overall.
“The fourth-quarter index marks a full year of cautious optimism among business leaders,” said Richard Wobbekind, executive director of the Leeds School of Business Research Division at the University of Colorado at Boulder. “But at the same time, political and economic environments in the U.S., including the upcoming presidential election and the impending fiscal cliff, are posing challenges.” The index is based on the results of quarterly surveys.
A component of the index tracking expectations for the state economy edged down three-tenths of a point, but at 56.3 reflected a more upbeat outlook for Colorado than the United States for a 30th consecutive quarter. While about 46 percent of business leaders responding to the fourth-quarter survey remained neutral, nearly 39 percent said they expected economic expansion in the state.
The component measuring expectations for the national economy was the only index reading to increase for the fourth quarter. The reading rose eight-tenths, but at 46.8 remained in negative territory.
Another component of the index tracking sales expectations declined nearly five points to 53.2. More than 42 percent of business leaders were neutral, nearly 35 percent expected increases and 23 percent anticipated declines. The reading for profit expectations fell almost three points, but at 52.2 remained above growth-neutral 50.
The component tracking hiring expectations among Colorado business leaders retreated nearly three points to 51.
According to estimates from the Colorado Department of Labor and Employment for August, the latest month for which figures are available, the business and professional services sector added 9,500 net new jobs over the past year. Construction payrolls grew 5,100, while the financial activities sector added another 4,600 positions.
The information sector has shed 2,000 jobs over the past year.
The reading for capital expenditures fell more than two points to 50.2.
Asked specifically how the presidential election affects their business decisions, those responding to the fourth-quarter survey were divided among those who said they’ve put off major investment and hiring decisions, those who remain hesitant because of broader regulatory and political uncertainty and those who said the election has had no effect on their operations.