Business-confidence index wanes slightly

BOULDER – The confidence of Colorado business leaders has slightly declined going into the fourth quarter as uncertainty surrounds the government shutdown and the federal deficit increase, according to the most recent Leeds Business Confidence Index released Tuesday by the University of Colorado Boulder’s Leeds School of Business.

The fourth-quarter index posted a reading of 59.3, which is a decrease from 60.5 last quarter but still near a post-recession high. Expectations measured positive – at 50 or higher – for all of the metrics measured by the index, which include the national economy, state economy, industry sales, industry profits, capital expenditures and hiring plans.

These across-the-board positive standings come after the national economy and industry hiring plans categories were in negative territory just three quarters ago.

“Business leaders remained optimistic overall, despite confidence being tested by uncertainty coming out of Washington,´ said economist Richard Wobbekind, executive director of the Business Research Division. “Coupling business confidence with other economic metrics, Colorado looks to be on a stable growth trajectory.”

Confidence in the national economy was the most significant finding revealed in this quarter’s numbers, especially given underlying federal budget uncertainty, according to Wobbekind. Confidence in the national economy fell 2.6 points to 55.5 in the fourth quarter, down from 58.1 last quarter.

Confidence in the state economy, which decreased to 63.9 in the fourth quarter from 64.6 last quarter, outpaces that of the national economy. The outpacing of confidence in Colorado’s economy compared with the national economy is a 34-quarter trend, based on LBCI results.

Business leaders’ sales expectations for the fourth quarter came in at 62, down from 63.7 for the third quarter, while the profits metric increased slightly.

The capital expenditures index fell to 57.4 for the fourth quarter, down from 59.3 for the third quarter. The hiring plans index decreased to 57.8, down from 58.9 last quarter.

More information about the LBCI, including the fourth-quarter report for 2013, is available at http://leeds.colorado.edu/brd#leedsbusinessconfidenceindex.

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