BOULDER — No surprise, but business confidence in Colorado has dropped because of the spread of the COVID-19 virus.
What may be a surprise is that the index compiled by the Leeds Business Research division at the University of Colorado Boulder business school declined to its lowest recorded level in its 17-year history, dropping 21.1 points just prior to the start of the second quarter of the year.
The index stood at 29.7 overall; 50 is considered neutral and the index stood at 50.8 in the first quarter of 2020.
The quarterly report marks Colorado business leaders’ expectations for the state and national economies, industry sales, industry profits, hiring and business spending. More than 400 business leaders responded to the latest survey, run between March 1 and March 20, 2020.
All six LBCI categories are well below 50, with the national economy posting the lowest outlook at 21.8.
“The survey reflects the rapid deterioration of the economy and how business leaders are digesting the early days of this worldwide crisis,” Brian Lewandowski, executive director of the Leeds Business Research Division, said in a statement that accompanied the release of the report early this morning. “Our survey also took place before the latest batch of economic data, which doesn’t look very promising.”
Most of the panelists cited coronavirus for their pessimism, with 86% pointing to the pandemic. Panelists also pointed to the overall economy, upcoming election and the oil market.
Panelists indicated more optimism about the state economy for the upcoming quarter, with an score of 28.8. They gave hiring and business spending, also known as capital expenditures, higher marks than business leaders submitted during the Great Recession.
Colorado business leaders also expect the economy to rebound somewhat, giving the third quarter of 2020 a score of 38.2.
“There is optimism that the worst of the impact will be short-lived,” Lewandowski said. “Although this is a big drop for one quarter, the index saw a bigger cumulative drop during the Great Recession. This looks like it could be different.”