Colorado business optimism continues to recover from historic lows but it is still not back into positive territory, according to a new report from the CU Boulder’s Leeds Business Research Division.
The quarterly Leeds Business Confidence Index (LBCI), produced by the Leeds Business Research Division (BRD) at the Leeds School of Business, reflects Colorado business leaders’ expectations for the state and national economies, industry sales, industry profits, hiring and business spending.
Panelists asked to look ahead to the fourth quarter and beyond gave an overall LBCI score of 47.9, which is on the pessimistic side of neutral, according to the BRD. An LBCI score of 50 indicates a neutral outlook. Scores below 50 indicate pessimism and scores above 50 indicate optimism.
“The slow rebound in Colorado business sentiment reflects the lingering impacts of COVID-19,” said Richard Wobbekind, senior economist at the Leeds School of Business. “However, it also shows optimism that this recession will be short-lived.”
Sales expectations remain the most positive LBCI segment among panelists, with an LBCI score of 52.5. The national economy and business spending (capital expenditures) are the lowest scores for the fourth quarter of 2020.
Panelists are asked to give reasons for their expectations. COVID-19 was the most cited (39%). The November election was the next most-cited reason (21%). Nearly one in five panelists noted economic resiliency and pent-up demand behind their positive expectations.
“We also wanted to get a read on when panelists expect employment to return to normal. Most of our panelists expect that to happen by the second half of 2022,” said Wobbekind.
More than 400 panelists answered the LBCI survey from Sept. 1-21, 2020.
The COVID-19 economic rebound
The national unemployment rate continued to improve to 8.4% in August, down from 11.1% in June.
Colorado’s non-farm employment in August was down 5.3% year-over-year, equating to roughly 147,800 jobs lost. However, the state recovered 178,500 jobs (7.3%) from April to August.
While all of Colorado’s metropolitan statistical areas (MSA) lost jobs, the Boulder MSA recorded the largest year-over-year employment decline (-6.2%). The Grand Junction MSA marked the smallest decline (-0.6%).