The confidence of Colorado business leaders has continued its strong upward trend, surging into the third 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.
The third quarter LBCI posted a reading of 60.5, an increase from 58.1 last quarter. Expectations measured positive -- at 50 or higher -- for all of the metrics measured by the index, which include the national economy, state economy, industry sales, industry profits, capital expenditures and hiring plans. These across-the-board positive standings come after the national economy and industry hiring plans categories were in negative territory just two quarters ago.
“The index is very strong, universally strong -- a significant uptick in confidence,” said economist Richard Wobbekind, executive director of the Business Research Division. “The previous second quarter index was solid, and we were saying, ‘This looks like good momentum and it’s going to continue.’ This index reading is even stronger than we’d expected.”
The Leeds School’s Business Research Division conducts the LBCI, which now is in its 10th year.
A jump in confidence regarding the national economy was the most significant change in this quarter’s reading, according to Wobbekind. Confidence in the national economy surged 7.7 points to 58.1 in the third quarter, up from 50.4 last quarter.
Confidence in the state economy, which increased to 64.6 in the third quarter from 62.1 last quarter, is the highest it’s been in more than a year and outpaces that of the national economy. The outpacing of confidence in Colorado’s economy compared with the national economy is a 33-quarter trend, based on LBCI results.
Business leaders’ sales expectations for the third quarter increased to 63.7, up from 62.3 for the second quarter. While the profits metric declined slightly, it is still very strong.
The capital expenditures index climbed to 59.3 for the third quarter, up from 56.9 for the second quarter. The hiring plans index increased to 58.9, up from 57.5 last quarter.
While Colorado employment figures vary greatly by industry, in May 2013 labor markets in all of the state’s metropolitan areas saw growth compared with a year earlier. Some of the areas showing the highest growth include the Denver-Aurora-Broomfield, Fort Collins-Loveland and Boulder metropolitan statistical areas.
Statewide, the biggest employment gains in May compared with the same month last year were in the professional and business services sector with the addition of 15,700 jobs. The leisure and hospitality sector added 10,500 jobs, and the education and health services sector gained 7,600 jobs.
When asked which indicators they use to get a quick gauge of the U.S. economy, respondents to the LBCI overwhelmingly chose measures related to the labor market. The level of employment was cited most frequently as the indicator used to gauge the national economy, while unemployment also figured prominently. Consumer confidence placed a close second to employment.
More information about the LBCI, including the third-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.