The optimism of Colorado business leaders increased slightly ahead of the second quarter of 2017 and is expected to remain stable into the third quarter of the year, according to a University of Colorado Boulder report.
Released today, the Leeds Business Confidence Index shows an uptick of 3.1 points from last quarter, with an overall reading of 63.4. This is up by 8 points from one year ago.
Expectations measured positive – at 50 or higher – for all of the metrics within the index, including the national economy for the second straight quarter. Measured in the index are the state economy, industry sales, industry profits, capital expenditures, hiring plans and the national economy. For all but the national economy category, the current standings represent 18 consecutive quarters of positive expectations.
“While both the state and the national economies are on stable ground, business leaders are more optimistic about Colorado,” said economist Richard Wobbekind, executive director of the Leeds School’s Business Research Division, which conducts the index. “I think they see the numbers of people moving to the state. They see employment continue to grow at a good pace and they are very optimistic about sales and profitability.”
Wobbekind said one concern for the Colorado economy is a disparity between inflation and wages.
“The numbers are showing Colorado with a higher rate of inflation than the nation,” he said. “We’re very focused on the growth in per capita income, which has not been that strong in the last year compared to growth in the actual cost of living. Either we are going to have to have a cooling of inflation in the state, or we’re going to have to have wages go up more rapidly in order to keep the workers on an even keel.”
Sector-by-sector highlights from the second-quarter Leeds Business Confidence Index for 2017 are as follows:
- State economy expectations rose to 67 from 62.8 in the first-quarter index;
- National economy confidence rose to 63.9 from 61.3 in the first-quarter index;
- Profits expectations rose to 62.8 from 59.4 in the first-quarter index;
- Sales expectations rose to 64.3 from 59.8 in the first-quarter index;
- Capital expenditure expectations rose to 61 from 59.1 in the first-quarter index;
- Hiring expectations rose to 61.7 from 59.5 in the first-quarter index.
- Colorado’s unemployment level, which remains lower than the national level, decreased to 2.9 percent in February 2017 (down from 3 percent in November 2016). The February rate compares with 4.7 percent nationally.
Seasonally adjusted year-over-year employment growth was recorded in six of the state’s seven Metropolitan Statistical Areas (MSAs) with Boulder (+3.2 percent), Fort Collins (+3.1 percent) and Colorado Springs (+2.5 percent) seeing the fastest expansion. Grand Junction had the only negative employment growth rate at -0.7 percent.
Statewide, the biggest year-over-year employment gains in February 2017 were in the construction (+4.5 percent), other services (+3.5 percent) and education and health services (+3 percent) sectors.
Visit the Leeds School’s Business Research Division for the second-quarter report and more information.