A quarterly survey of Colorado business leaders always yields interesting results — offering not only a statistical snapshot of their collective mood, but also  an indication of their plans for hiring, capital expenditures and sales.

The latest survey results also reflect the strange juxtaposition in which business leaders find themselves these days. The COVID-19 pandemic, labor shortages, supply chain disruptions and surging inflation all present unprecedented challenges even as demand for products and services remains strong.

A story in this issue details the Leeds Business Confidence Index. But to recap here, the reading for overall expectations for the first quarter of the new year climbed 1.9 points to 58. Moreover, individual readings for each of six metrics the index tracks also rose to levels above 50. That’s significant because readings above 50 indicate more positive than negative responses.

The business research division at the Leeds School of Business at the University of Colorado at Boulder calculates the index based on the results of surveys of business leaders from across the state and various industry sectors.

Confidence in the Colorado economy rose 2.5 points to 57.6 with nearly half of those who responded to the survey forecasting moderate or strong increases in the state economy. Looking ahead to the second quarter, the reading moved even higher to 59.4. That bodes well for the prospects of a sustained recovery.

There was more encouraging news in the readings for hiring and capital expenditures — two metrics that reflect investment in the growth of businesses.
The reading for hiring rose 2.1 points to 63.7, while the reading for capital expenditures increased 2.9 points to 58.3. The reading for sales advanced 1.2 points to 60.2 with nearly 60 percent of respondents anticipating moderate or strong increases.

Asked to identify the reasons for their expectations, business leaders cited strong demand. But they also cited concerns — among them inflation, the pandemic, supply chain issues and labor shortages. Fully 92 percent noted the effects of inflation on their businesses ranging from some to extreme. A total of 68 percent of those who responded don’t expect inflation to moderate until the second half of 2022 or even 2023. The same proportion said they expect to increase wages as a result.

The results of the Leeds survey correspond with the latest results of a national survey of small business owners conducted by the National Federation of Business. The Small Business Optimism Index rose a half point to 98.9 with increases in seven of 10 components from November to December.

But 25 percent of those who responded to the survey upon which the index was based cited quality of labor as their single most important business problem. Another 22 percent cited inflation. A net 48 percent of respondents reported raising compensation, a record level. A net 32 percent said they expect to raise compensation in the next three months.

The results of the Leeds and NFIB surveys produce a lot of numbers for business leaders to consider. Statistical dot-to-dot pictures aren’t complete, of course. But it’s clear challenges will persist for as long as the pandemic persists. And higher wages likely will be required to attract and retain employees.

But the numbers also offer encouragement for improving economic conditions and strong demand. Add to that less tangible factors, and that’s the innovation business owner and managers bring to their endeavors and a determination to succeed regardless of the circumstances.