Business confidence healthy — but dipping

BOULDER — Optimism remains strong among business leaders in Colorado as they enter the third quarter of 2016, according to a quarterly index released June 30. However, the report by the University of Colorado Boulder’s Leeds School of Business also predicted that that confidence could sag a bit before the fourth quarter begins Oct. 1.

The Leeds Business Confidence Index showed an overall reading of 54.6, down from the 55.4 it recorded at the beginning of the second quarter in April. Leeds predicted an overall confidence reading of 51.9 by the time the fourth quarter begins.

Third-quarter expectations have fallen by 3.6 points and fourth-quarter expectations have fallen by 1.6 points from the same quarters in 2015.

“The state has been experiencing a slowdown in growth, but still a healthy growth,” said economist Richard Wobbekind, executive director of the Leeds School’s Business Research Division, which conducts the quarterly index.

Even so, nearly all the metrics in the third-quarter index — the state economy, industry sales, industry profits, capital expenditures and hiring plans —still indicate positive expectations, scoring 50 or higher for the 19th straight quarter. The notable exception is expectations about the national economy, which have been in negative territory since the fourth quarter of 2015.

Business leaders were surveyed for the Leeds third-quarter report before the United Kingdom’s referendum on exiting the European Union last week. At that time, Wobbekind said, business people’s top concerns were the upcoming U.S. election, commodity and energy prices, and interest rates and federal policy,

State economy expectations were essentially flat at 57.4 in the third quarter, up from 57.3 entering the third quarter. ahead of the second quarter; Profit expectations rose from 56.7 to 56.9, while capital-expenditure expectations climbed from 54.1 to 54.4. However, sales expectations dipped from 59.5 to 58.6, hiring expectations fell from 55.6 to 53.9, and confidence in the national economy decreased from 49.5 to 47.2.

The Leeds report noted that Colorado’s unemployment rate remained lower than the national level, even though it increased to 3.4 percent in May from a 15-year low in March of 2.9 percent. The national jobless rate in May was 4.7 percent.

The Boulder metropolitan statistical area saw a strong year-over-year increase in employment growth, posting a 2.7 percent gain in May, compared with the same month last year, The previous Leeds report compared employment growth in February to the same month in 2015, and Boulder posted a 1.8 percent gain.

While responding panelists represent nearly every industry in the state, the largest percentage of respondents to the Q3 survey were: Professional, Scientific, and Technical Services (21.7 percent); Finance and Insurance (17.7 percent); and Public Administration (11.7 percent).

The Fort Collins-Loveland area saw May 2016 employment growth at a clip 3 percent faster than the same month in 2015. It had done 3.8 percent better in February than in February 2015.

Greeley had a slower February this year than it did in the same month last year, with employment growth edging downward 0.6 percent. It rebounded a bit in May, however, scoring 1.4 percent better than it had in May 2015.

Year over year, the biggest employment gains in May were 7.1 percent growth in the construction sector. Leisure and hospitality were ahead 5 percent, and education and health services saw 3.1 percent growth.

About 21.7 percent of the surveyed panelists in the new Leeds report came from the professional, scientific and technical-services sectors, while 17.7 percent came from finance and insurance businesses, and 11.7 percent were public administrators.

Dallas Heltzell can be reached at 970-232-3149, 303-630-1962 or dheltzell@bizwestmedia.com. Follow him on Twitter at @DallasHeltzell.