Colorado business leaders remain mostly optimistic about the coming months, but also concerned about the potential effects of a variety of factors, according to the latest results of a quarterly survey.
“While expectations remain positive for the next two quarters, expectations will slip slightly heading into the third quarter,” said Richard Wobbekind, executive director of the research division at the Leeds School of Business at the University of Colorado in Boulder.
“Heading into the third quarter, our panelists noted concerns about the pending election, energy prices and the global economy,” Wobbekind said.
CU reported that its Leeds Business Confidence Index remained unchanged at 55.4 for the second quarter.
The index is based on the results of surveys of more than 300 business leaders from across the state and a range of industry sectors. Readings above 50 indicate more positive than negative responses. The overall reading for the index has remained above 50 for 18 straight quarters.
The index is expected to slip a point for the third quarter of 2016 based on survey results reporting concerns related to the election, the effects of low commodity prices, the global economy and slower job growth.
For the second quarter, readings topped 50 for all but one of the metrics the index tracks.
Confidence in the Colorado economy fell two points, but remained well above 50 at 57.3. Nearly 40 percent of business leaders responding to the survey upon which the latest index was based said they expect a moderate to strong increase in the economy. About 47 percent said they anticipate no change, while 13 percent forecast a moderate or strong decrease. Confidence in the U.S. economy fell a point to 49.5.
The reading for hiring rose seven-tenths of a point to 55.6 with almost 49 percent of leaders expecting no change in staffing. Meanwhile, 37 percent of leaders forecast increased hiring and about 14 percent predicted layoffs. More than half those who responded to the survey said there was a talent shortage in Colorado that could lead to higher wages, lower retention rates and slower business growth.
The reading for capital expenditures edged up a tenth of a point to 54.1. Nearly 50 percent of survey respondents said they anticipate no change, while almost 33 percent forecast increases and 17.5 percent forecast decreases.
The reading for sales rose more than a point to 59.5 with almost 49 percent of business leaders forecasting moderate to strong increases. While nearly 37 percent said they expect no change, about 14 percent anticipated decreased sales.
The reading for profits advanced more than a point to 56.7 with almost 42 percent of respondents expecting increases, about 41 percent anticipating no change and nearly 17 percent forecasting decreases.