Colorado business leaders remain mostly upbeat going into the third quarter, but also concerned about several factors that could slow the economy, according to the latest results of a survey tracking their outlooks.
The Leeds Business Confidence Index retreated 3.4 points for the third quarter, the largest decline since the second quarter of 2013. But at 58.3, the latest reading still reflects positive expectations and extends the string of readings above 50 to 15 consecutive quarters.
“While the index is still comfortably positive heading into quarter three, business leaders expressed some hesitation,” said Richard Wobbekind, executive director of the business research division at the Leeds School of Business at the University of Colorado in Boulder. “Potential headwinds bringing down expectations in Colorado include the production impact of lower oil prices, relatively high cost of housing, tight labor market and macroeconomic factors impacting exports.”
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.
For the third quarter, readings fell in each of the six metrics the index tracks, but also remained above 50.
Confidence in the Colorado economy fell two points to 61.2. While nearly 49 percent of the business leaders responding to the latest survey said they expect the economy to expand, 41 percent anticipate no change.
Confidence in the United States economy fell five points to 55.4 with 38 percent of business leaders expecting expanding conditions and 18 percent anticipating a retraction.
Expectations for sales fell 4.5 points to 59.8. While 51 percent of business leaders expect increasing sales, 33 percent anticipate no change and 16 percent believe sales will decline.
The reading for profits fell more than two points to 58.5 with 48 percent of leaders expecting increased profits, 34 percent believing there’ll be no change and 18 percent anticipating lower profits.
Colorado business leaders expect payrolls to continue to grow, but lower expectations pulled down the reading for hiring 4.9 points to 57.3. While 45 percent of leaders anticipate increased hiring, 38 percent expect no change and 16 percent believe hiring will decrease.
The reading for capital expenditures fell 1.8 points to 57.5 with 43 percent of leaders anticipating an increase in expenditures, another 43 percent expecting no change and 14 percent forecasting a decrease.