An index tracking confidence among Colorado business leaders reflects upbeat expectations heading into the new year, stretching to record length the string of optimistic responses to quarterly surveys.
“Strong signals from the market are keeping confidence up, including the acceleration of GDP growth, employment gains and a federal budget compromise,” said Richard Wobbekind, executive director of the business research division at the Leeds School of Business at the University of Colorado at Boulder.
The Leeds Business Confidence Index rose six-tenths of a point to 59.9 for the first quarter of 2014. Readings above 50 indicate positive expectations for the coming quarter.
The index has reflected positive expectations for nine consecutive quarters, tying a record for the index set between 2003 and 2005.
The index is based on the results of quarterly surveys of business leaders from across the state and a range of industry sectors.
The index corresponds with an annual economic outlook report prepared by CU forecasting increased hiring, retail sales and construction during 2014.
Other indicators also point to improving conditions, Wobbekind said.
Gross domestic product, the broad measure of goods and serviced produced in the country, rose at an annual rate of 4.1 percent during the third quarter of 2013.
U.S. nonfarm payrolls have increased an average of 195,000 a month over the year ending in November. In Colorado, payrolls increased 46,000 over the same span with the most job growth in the construction, education and health care and professional and business services sectors.
A federal budget compromise that eased cuts imposed under sequestration has eased concerns. And the Federal Reserve announced it will taper a bond purchasing program, a signal an improving economy no longer requires the same level of fiscal stimulus.
For the first quarter, the results were positive for each of six metrics tracked by the Leeds Business Confidence Index.
A component of the index tracking confidence in the Colorado economy rose nearly a point to 64.8. More than 58 percent of business leaders responding to the survey upon which the first quarter index was based expected moderate to strong increases in the state economy. About 36 percent of leaders anticipated no change, while about 5 percent forecast a moderate or strong decrease.
Confidence in the United States economy jumped nearly two points to 57.4, the biggest single increase in the first quarter index. Still, the outlook for the state economy has outpaced that of the national economy for 35 straight quarters.
A component of the index tracking expectations for hiring advanced 1.5 points to 59.3. While 45 percent of business leaders forecast moderate to strong increases in hiring, about 43 percent anticipated no change and nearly 12 percent expected moderate to strong decreases.
The reading for capital expenditures rose 1.6 points to 59. More than 47 percent of leaders anticipated moderate to strong increases in capital spending, while almost 39 percent expected no change and about
14 percent anticipated a moderate to strong decrease.
Expectations for sales and profits during the first quarter dropped, but remained well above 50.
The reading for sales fell eight-tenths of a point to 61.2 despite nearly 56 percent of business leaders forecasting moderate or strong increases in sales. While almost 29 percent of leaders expected no change, nearly 16 percent anticipated moderate or strong decreases.
The reading for profits dropped 1.4 points to 57.9 although almost 48 percent of leaders said they expect moderate or strong increases during the first quarter. Nearly 33 percent of leaders anticipated no change, while almost 20 percent forecast moderate or strong decreases in profits.