Colorado business confidence remains positive at start of 2014
Confidence among Colorado business leaders has increased slightly going into the first quarter of 2014, reports the University of Colorado Boulder Leeds School of Business.
As economic conditions improve and some political issues have subsided, so has optimism in the business community, according to the Leeds Business Confidence Index (LBCI). The LBCI is a forward-looking index that gauges business leaders’ opinions about national and state economic trends and how their industries will perform in the coming quarter.
Economist Richard Wobbekind, executive director of the Leeds School’s Business Research Division, said in a prepared statement this level of confidence is similar to that seen before the Great Recession.
“The sustained confidence over the past several quarters now ties the record for optimism set from 2003 to 2005,” he said. “Strong signals from the market are keeping confidence up, including the acceleration of GDP growth, employment gains and a federal budget compromise.”
The first quarter LBCI came in overall at 59.9, an increase from 59.3 last quarter. Expectations measured positive — at 50 or higher — for all of the metrics measured by the index, including national economy, state economy, industry sales, industry profits, capital expenditures and hiring plans. According to the Leeds School, these across-the-board positive standings represent nine consecutive quarters of positive expectations.
While remaining in positive range, the only expectations that fell going into 2014 were those of sales and profits. Business leaders’ sales expectations for the first quarter came in at 61.2, down from 62 in the fourth quarter of 2013. The profits metric fell to 57.9, down from 59.3 last quarter.
However, confidence in the state economy increased from 63.9 last quarter to 64.8 — outpacing confidence in the national economy, a 35-quarter trend measured in the LBCI.
LBCI panelists indicated that in spite of a slip in sales and profits expectations, there are still increased expectations for investments in labor and capital. The capital index measured 59 for the first quarter, up from 57.4 last quarter. Hiring plans index increased from 57.8 up to 59.3.
While Colorado employment figures vary greatly from industry to industry, labor markets in the state’s metropolitan areas saw growth in November, compared with a year earlier. The top three areas were Greeley, Denver-Aurora-Broomfield and Boulder.
Statewide, the biggest employment gains in November compared with the same month last year were in professional and business services, education and health services and construction industries.
The Leeds School’s Business Research Division released its 49th annual Colorado Business Economic Outlook last month, which forecast broad-based job growth in the state for 2014.
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