The optimism of Colorado business leaders remains unchanged entering the second quarter of 2016, but is projected to slightly dip ahead of the third quarter of the year, according to a University of Colorado Boulder report.
Released today, the Leeds Business Confidence Index shows the same level of optimism now as was recorded at the start of the first quarter with an overall reading of 55.4. This is down by 6.3 points from one year ago. A decrease in confidence to 54.4 is expected ahead of the third quarter of 2016.
Expectations measured positive – at 50 or higher – for all of the metrics in the index except the national outlook. The current standings represent 18 consecutive quarters of positive expectations, according to the index. Business leaders’ outlook remained positive for the state economy, industry sales, industry profits, capital expenditures and hiring plans.
“While expectations remain positive for the next two quarters, expectations will slip slightly heading into the third quarter,” said economist Richard Wobbekind, executive director of the Leeds School’s Business Research Division, which conducts the index. “Heading into the third quarter, our panelists noted concerns about the pending election, energy prices and the global economy.”
Additionally, more than half of respondents surveyed for the index indicated a talent shortage in Colorado, which can lead to higher salaries or wages, lower retention rates, slower business growth and higher project costs, as well as longer recruiting processes and the need to hire from out of state.
Sector-by-sector highlights from the second-quarter Leeds Business Confidence Index for 2016 are as follows:
- State economy expectations fell to 57.3 from 59.3 in the first-quarter index;
- National economy confidence decreased to 49.5 from 50.5 in the first-quarter index;
- Profits expectations rose to 56.7 from 55.3 in the first-quarter index;
- Sales expectations ticked up to 59.5 from 58.4 in the first-quarter index;
- Capital expenditure expectations were relatively flat at 54.1 compared with 54 in the first-quarter index;
- Hiring expectations increased to 55.6 from 54.9 in the first-quarter index.
Colorado’s unemployment level decreased from 3.5 percent in November 2015 to 3 percent in February 2016. The February rate compares with a national unemployment rate of 4.9 percent at that time.
Year-over-year employment growth was recorded in most of the Metropolitan Statistical Areas (MSAs) of the state with the Fort Collins-Loveland (+3.8 percent) and the Colorado Springs (+2.7 percent) MSAs seeing the fastest expansion. They are followed by the Denver-Aurora-Broomfield (+2.5 percent), Boulder (+1.8 percent), Pueblo (+1.5 percent) and Grand Junction (+.2 percent) MSAs. The Greeley MSA (-.6 percent) has now recorded six consecutive months of year-over-year declines.
Statewide, the biggest employment gains in February 2016 compared with the same month in 2015 were in the leisure and hospitality (+6.3 percent), construction (+4.3 percent) and education and health services (+4 percent) sectors.