Colorado business leaders are more upbeat heading into the new year, although they remain concerned about inflation, the COVID-19 pandemic and labor shortages.

The Leeds Business Confidence Index climbed to 58 for the first quarter of 2022. That’s 1.9 points higher than the fourth quarter of 2021 and 10.1 points higher than the first quarter of 2021.

Looking ahead to the second quarter of 2022, the overall score moved even higher to 59.4 on expectations for a sustained recovery.

Readings above 50 indicate more positive than negative responses. The long-term average for the index stands at 54.4.

The business research division at the Leeds School of Business at the University of Colorado at Boulder calculates the index. The index is based on the results of quarterly surveys of business leaders from across the state and various industry sectors. A total of 231 people responded to the survey upon which the first quarter index was based.

In addition to an overall score, the index provides individual scores for each of six metrics. All six scores increased between the fourth and first quarters to levels above 50.

Confidence in the Colorado economy rose 2.5 points to 57.6. A total of 49.8 percent of business leaders who responded to the first quarter survey predicted moderate or strong increases in the state economy, while 33.6 percent forecast no change and a total of 16.6 percent anticipated moderate or strong decreases.

Gross domestic product, the broad measure of goods and services produced in the state, rose at an seasonally adjusted annual rate of 2.3 percent during the third quarter of 2021.

Confidence in the national economy rose 1.5 points, but at 50.4 was the lowest score for the six metrics. While a total of 42.4 percent of leaders expected moderate of strong increases, 31.3 percent anticipated no change and a total of 26.3 percent forecast moderate or strong decreases.

Hiring expectations rose 2.1 points to 63.7, the highest score for the six metrics. A total of 50.6 percent of leaders anticipated moderate or strong increases in hiring, 38.7 percent expected no change and 10.6 percent forecast moderate or strong decreases.

Nonfarm payrolls increased 117,500 in Colorado between November 2020 and 2021, with 2.9 percent employment growth in Mesa County during that span. The statewide jobless rate stood at 5.1 percent in November 2021.

Capital expenditure expectations climbed 2.9 points, the largest gain of the six metrics, to 58.3. Even as 41.4 percent of respondents projected moderate or strong increases in expenditures, 43.3 percent expected no change and 15.2 percent forecast moderate or strong decreases.

Sales expectations rose 1.2 points to 60.2 with 58.6 percent of respondents anticipating moderate or strong increases. While 27.2 percent forecast no change, 14.3 percent expected moderate or strong decreases.

Profit expectations climbed 1.3 points to 57.9 with 50.7 percent of business leaders projecting moderate or strong decreases. While 32 percent forecast no change, 17 percent anticipated moderate or strong decreases.

Asked to offer reasons for their expectations for the six metrics, 28 percent of business leaders who provided open-ended explanations cited inflation as a concern, followed by COVID-19 at 24 percent, supply chain issues at 16 percent and labor constraints at 11 percent. At the same time, 10 percent cited what they considered as an improvement in the pandemic as reason for optimism and 9 percent cited strong demand.