Colorado business confidence surges going into second quarter

April 2, 2013

April 2, 2013                         Richard Wobbekind

The confidence of Colorado business leaders has surged going into the second quarter of 2013, according to the most recent Leeds Business Confidence Index, or LBCI, released today by the University of Colorado Boulder’s Leeds School of Business.

Economist Richard Wobbekind (WAH-b-kin), executive director of the Leeds School’s Business Research Division, says a strengthening Colorado economy is fueling confidence among the state’s business leaders.

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Colorado business confidence surges going into second quarter

April 2, 2013                         Richard Wobbekind

The confidence of Colorado business leaders has surged going into the second quarter of 2013, according to the most recent Leeds Business Confidence Index, or LBCI, released today by the University of Colorado Boulder’s Leeds School of Business.

Economist Richard Wobbekind (WAH-b-kin), executive director of the Leeds School’s Business Research Division, says a strengthening Colorado economy is fueling confidence among the state’s business leaders.

CUT 1 “They have very positive views on the Colorado economy. So it certainly is playing into the confidence index numerically but it’s also a reflection of the fact that these are Colorado businesses seeing better business in a state that is growing more rapidly.” (:16)

The second quarter LBCI posted a reading of 58.1, a sharp increase from last quarter’s 51.3 reading. Expectations measured positive -- at 50 or higher -- for all of the metrics measured by the index. Most importantly, says Wobbekind, the hiring plans index recorded the greatest surge among all of the LBCI components, increasing to 57.5 from 49.3 for the second quarter.

CUT 2 “The hiring number rose the highest percentage in the number of points in the index and that’s really positive right now. It was hanging around neutral and it jumped to very positive. (:12) So this is suggesting to us that the respondents in the survey are saying we got through the uncertainty, now we are going to go out and hire the people that we need.” (:23)

Wobbekind says that for the first time, index participants were asked about sequestration in addition to other factors that could derail economic growth. Surprisingly business leaders were not as concerned about those factors

Instead, says Wobbekind, the main concerns are taxes and a drop in consumer confidence.

CUT 3 “The biggest concern, by far, was consumer confidence. Businesses knew that confidence levels had to stay high for them to continue to succeed. And they were also concerned about tax changes that might be affecting business in general. (:15) Part of what they’re dealing with is the payroll tax increase from January, but part of it may be what comes out of the solution to sequestration and their worries about how that may impact them, their firm or their customers.” (:27)

Another indicator that the state economy is recovering is the jump in sales expectations, says Wobbekind, shooting up to 62.3 from 54.4 for the first quarter.

CUT 4 “The sales number is the highest overall number and that’s always a good indicator because when you are responding to sales over that next three to six months most of these businesses probably have a pretty good idea of what’s coming in the pipeline. So that’s a very positive indicator.” (:15)

The Leeds School’s Business Research Division conducts the LNCI. Now in its 10th year, Wobbekind is optimistic that the LBCI numbers are reflective of the improving economy.

CUT 5 “We have a pretty long track record here when we are looking at the economy and so when we get significant upticks, like we saw in this quarter, it really does give us quite a bit of optimism that businesses really are seeing overall improvements in the marketplace in front of them. “ (:16)

More information about the LBCI, including the second-quarter report for 2013, is available at http://leeds.colorado.edu/brd#leedsbusinessconfidenceindex. For more information about the Business Research Division visit http://leeds.colorado.edu/brd#overview.

 

-CU-

 

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