Colorado business leaders are more optimistic about the months ahead and what they foresee as an economic recovery, according to an index based on the results of a quarterly survey.
The Leeds Business Confidence Index rose 2.9 points to 67.3 for the third quarter.In the midst of the COVID-19 pandemic a year ago, the index was 23 points lower at 44.3.
“The reopening of the economy, increased demand and decreasing COVID-19 cases in conjunction with a vaccine has generated more confidence amongst business owners,” said Rich Wobbekind, senior economist and faculty director of the business research division at the Leeds School of Business at the University of Colorado at Boulder.
“These results indicate that business owners believe this will be a sustained economic recovery,” Wobbekind said.
The division calculates the index based on the results of quarterly surveys of business leaders across the state and industry sectors. Readings above 50 reflect more positive than negative responses.
All six of the metrics the index tracks increased for the third quarter to levels well above 50.
Confidence in the Colorado economy rose 2.6 points to 70.9 and the highest reading among the six metrics. A total of 74.4 percent of business leaders responding to the latest survey predicted a moderate or strong increase in the state economy, while 18 percent expected no change and 7.6 percent forecast a moderate or strong decrease.
Confidence in the national economy rose 1.8 points to 67.5 with 69.6 percent of respondents anticipating a moderate or strong increase, 18.8 percent no change and 11.6 percent a moderate or strong decrease.
Sales expectations rose 2.1 points to 69.6 with 75.6 percent of respondents forecasting a moderate or strong increase, 16.4 percent no change and 8 percent a moderate or strong decrease.
Wobbekind said more than half of respondents reported sales had either never decreased or already returned to pre-pandemic levels. The remaining respondents expect to see recovery in the second half of 2021 or into 2022.
Profit expectations rose 2.1 points to 65.2 with 64.4 percent of respondents predicting a moderate or strong increase, 24.8 percent no change and 10.8 percent a moderate or strong decrease.
Hiring expectations increased the most among the six metrics — 5.9 points to 67.7. While 65.2 percent of those who responded anticipated a moderate or strong increase, 28.8 percent predicted no change and 6 percent a moderate or strong decrease.
The majority of respondents said they expect their company’s workforces to return to pre-pandemic levels sometime between the third quarter of 2021 and fourth quarter of 2022. About 12 percent of those who responded said they expect to never work remotely, down from 45 percent before the pandemic.
Expectations for capital expenditures rose 2.7 points to 62.6, the lowest reading among the six metrics. While 50.4 percent of respondents predicted a moderate or strong increase, 42.8 percent expected no change and 6.8 percent forecast a moderate or strong decrease.
Looking ahead to the fourth quarter, the overall index reading slipped 1.9 points to 65.4.
Wobbekind said business leaders who participated in the survey cited concerns about labor shortages, supply chain problems and inflation. Still, about 92 percent of respondents believe the state economy will remain neutral to positive in the fourth quarter.
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