Expecting the economy to rebound from the coronavirus pandemic, Colorado business leaders are more upbeat heading into the third quarter, according to the latest survey results.
Business leaders remain pessimistic overall, though, especially when it comes to spending and hiring.
“Business leaders are telling us they are optimistic the COVID-19 economic bounce back will occur fairly rapidly. However, the pessimism we’re seeing in business spending and hiring is a cause for concern,” said Richard Wobbekind, senior economist at the Leeds School of Business at the University of Colorado.
The Leeds Business Confidence Index rebounded to 44.3 for the third quarter, up 14.6 points from a record low 29.7. Readings below 50 reflect more negative than positive responses.
The business research division at the Leeds School of Business calculates the index based on quarterly surveys of business leaders in a variety of industry sectors from across the state.
For the third quarter, all six metrics the index tracks increased, although only one metric — for sales — topped 50.
Confidence in the Colorado economy rose 18 points to 46.8. While 39.3 percent of those who responded to the survey expected moderate or strong increases, 15.9 percent anticipated no change and 43.9 percent predicted moderate or strong decreases.
Confidence in the national economy rose 21.7 points to 43.5 with 37.4 percent of respondents anticipating increases, 15.6 percent no change and 47.1 percent decreases.
The reading for sales was highest for the third quarter with a 18.4-point gain to 51.3. While 47.8 percent of business leaders forecast increasing sales, 13.4 percent expected no changes and 38.8 percent anticipated decreases.
The reading for profits rose 13.3 points to 44.8 with 38 percent of leaders expecting increases, 15.9 percent no change and 46 percent decreases.
The reading for capital expenditures rose 6.1 points, but at 37.1 was lowest for the third quarter. While 18.3 percent of leaders expected increased spending, 31 percent anticipated no change and 50.7 percent forecast decreases.
The reading for hiring rose 10.3 points to 42.7 with 24.6 percent of leaders projecting staffing increases, 35.9 percent no changes and 39.5 percent decreases.
The third quarter survey also asked business leaders about the effects of the coronavirus pandemic on wages and staffing. Out of those who responded, 40 percent reporting reducing employee pay, 39 percent reported furloughs and 34 percent layoffs. Still, 26 percent of leaders said they were still hiring and 9 percent reported increased wages.
The biggest proportion of business leaders — 24 percent — estimated employment recovery for their companies during the first half of 2021. Another 21 percent expected recovery during the second half of 2020 and 20 percent the second half of 2021.