A measure of confidence among Colorado business leaders has declined for a second straight quarter, but continues to reflect a mostly upbeat outlook heading into the final three months of the year.
“We’re still in positive territory, and this is important to note,” said Richard Wobbekind, executive director of the business research division of the Leeds School of Business at the University of Colorado at Boulder.
CU reported that its Leeds Business Confidence Index fell nearly five points, but at 53.5 still indicates more positive than negative responses heading into the fourth quarter. The index has remained above 50 for 16 consecutive quarters. The index is based on the results of quarterly surveys of more than 250 business leaders from across the state and a range of industry sectors.
“We’re seeing an unemployment rate nationally and especially in Colorado that’s well within the realm of approaching full employment,” Wobbekind said. “But with the current volatility of the market, we’re experiencing consumers not being willing to spend as much because of the decline in their wealth. The recessionary effects of six years ago seem to remain on everybody’s mind, be it business owners or consumers.”
For the fourth quarter, readings declined for each of the six metrics the index tracks, but remained above 50 for five of the metrics.
Confidence in the Colorado economy fell four points between the third and fourth quarters to 57.2. Nearly half the business leaders responding to the survey upon which the fourth quarter index was based expect no change in the state economy. While almost 38 percent of leaders said they anticipate moderate or strong growth, about 14 percent forecast a moderate or strong decrease.
Confidence in the United States economy dropped seven points to 48.4, the first reading below 50 since the first quarter of 2013.
The reading for hiring expectations in Colorado slid 4.2 points to 53.1 with 35.5 percent of business leaders anticipating increased hiring, nearly 23 percent forecasting layoffs and almost 42 percent expecting no changes in payrolls. Over the past year, nonfarm payrolls have increased 47,000 even as the statewide seasonally adjusted unemployment rate has retreated four-tenths of a point to 4.2 percent.
The reading for capital expenditures declined 4.4 points to 53.1 with 33.2 percent of leaders anticipating increased spending and 24.1 percent of leaders expecting a decrease. Nearly 43 percent forecast no change.
The reading for sales fell 4.2 points to 55.6 with 43.1 percent of leaders predicting moderate or strong increases and 22.5 percent predicting moderate or strong decreases. About 34 percent said they anticipate no change.
The reading for profits fell 4.9 points to 53.6 with 40 percent of business leaders forecasting moderate or strong increases, 25 percent expecting moderate or strong decreases and the remaining 34 percent predicting no change.