Colorado business leaders remain mostly upbeat heading into the third quarter, but their latest responses to a survey also indicate growth could slow.
“The state has been experiencing a slowdown in growth, but still a healthy growth,” said Richard Wobbekind, executive director of the research division at the Leeds School of Business at the University of Colorado in Boulder.
The Leeds Business Confidence Index for the third quarter slipped eight-tenths of a point, but at 54.6 still reflects more positive than negative responses.
The index is based on the results of a survey of 281 business leaders from across Colorado and a range of industry sectors. The overall reading for the index has remained above 50 for 19 consecutive quarters.
Compared to a year ago, though, third-quarter expectations have dropped 3.6 points. Wobbekind said he expected that reading to dip further ahead of the fourth quarter.
The presidential election, interest rates and Federal Reserve policy and commodity and energy prices ranked among the top concerns for business leaders, Wobbekind said. The latest survey was conducted before voters in the United Kingdom opted to leave the European Union.
For the third quarter, readings topped 50 for all but one of the metrics the index tracks.
Confidence in the Colorado economy edged up a tenth of a point to 57.4. A total of nearly 40 percent of business leaders responding to the survey upon which the third-quarter index was based expected moderate or strong increases in the economy. Nearly 48 percent anticipated no change and almost 13 percent forecast moderate or strong decreases.
Gross domestic product, a broad measure of goods and services produced in a given area, grew at an annual rate of
2.8 percent in Colorado in the fourth quarter, the fourth-fastest growth nationally.
Confidence in the United States economy fell 2.3 points to 47.2 with a total of more than 32 percent of business leaders expecting a moderate or strong decrease in the national economy. The index reading for the national economy has remained below 50 since the fourth quarter. National GDP has slowed for three quarters with just eight-tenths of a percent of annual growth in the first quarter.
The reading for hiring in Colorado fell 2.2 points to 53.4 for the third quarter. While nearly 34 percent of business leaders said they anticipate moderate or strong increases in hiring, more than 47 percent forecast no change in staffing.
The statewide seasonally adjusted unemployment rate rose three-tenth of a point to 3.4 percent in May, the latest month for which estimates are available. Over the past year, nonfarm payrolls have grown 62,000 with the biggest gains in the construction, leisure and hospitality and education and health services sectors. Year-over-year employment growth in metropolitan areas of Colorado ranged from 3.1 percent in the Denver, Aurora and Lakewood area to 1.4 percent in Greeley.
In Mesa County, the seasonally unadjusted jobless rate dropped two-tenths of a point to 5.7 percent in May. Local job growth has lagged behind other areas of Colorado, however, with an increase of 1 percent over the past year.
The reading for capital expenditures rose three-tenths of a point to 54.4 for the third quarter. While 47 percent of survey respondents said they anticipate no change, more than 35 percent forecast increases and nearly 18 percent forecast decreases.
The reading for sales retreated nine-tenths of a point to 58.6 although almost 48 percent of business leaders forecast moderate to strong increases. While more than 38 percent of leaders said they expect no change, nearly 14 percent anticipated decreased sales.
The reading for profits rose two-tenths of a point to 56.9 with more than 43 percent of respondents expecting increases, about 41 percent anticipating no change and 16 percent forecasting decreases.