Colorado business leaders are less upbeat heading toward the end of the year, according to the latest results of a quarterly survey that reflect economic and political uncertainty.
“There has been a lot of conjecture about the national economy in 2019 and then further in 2020. Perhaps they’re looking at higher interest rates. The uncertainty in the U.S. economy is out there,” said Rich Wobbekind, executive director of the research division of the Leeds School of Business at the University of Colorado at Boulder.
The Leeds Business Confidence Index fell five points to 54.6 for the fourth quarter. The drop from the third quarter was the seventh largest in the 15-year history of the index. The index was higher at 56.5 for the fourth quarter of 2017. Readings above 50 still indicate more positive than negative responses, however.
The division bases the index on the results of surveys of business leaders across Colorado and a variety of industries. For the fourth quarter of 2018, readings declined for all six of the metrics the index tracks, but remained above 50.
Elections also curb confidence, Wobbekind said. “Political uncertainty tends to affect the confidence. It has in the past.”
Confidence in the Colorado economy fell 8.1 points to 55.3. While 59.9 percent of business leaders responding to the survey upon which the index was based expect no change in the economy,
29.3 percent anticipate moderate or strong increases and 10.8 percent forecast moderate or strong decreases.
Confidence in the national economy fell 6.9 points to 50.1, the lowest reading for the fourth quarter. While 45.9 percent of leaders forecast no change, 28 percent said they expect moderate or strong decreases and 26.1 percent anticipate moderate or strong increases.
The reading for hiring in Colorado fell 4.2 points to 55.3 with 45.5 percent of leaders expecting no change, 37.9 percent forecasting hiring and 16.7 percent anticipating layoffs. The statewide seasonally adjusted unemployment rate has held steady at 2.9 percent over the past year even as nonfarm payrolls have swelled 72,200.
The reading for capital expenditures fell 2.5 points to 54.4 with 42.3 percent of leaders anticipating no change, 37 percent forecasting moderate or strong increases and 20.7 percent expecting moderate or strong decreases.
The reading for sales fell 5.2 points to 56.1 with 36.9 percent of leaders forecasting no change, 43.2 percent expecting moderate or strong increases and 19.8 percent anticipating moderate or strong decreases.
The reading for profits fell 3.4 points to 56.4 with 37.8 percent of leaders expecting no change, 43.7 percent anticipating moderate or strong increases and 18.5 percent forecasting moderate or strong decreases.