BOULDER — A year after University of Colorado economists reported historically grave expectations for the state’s economy from business leaders, those expectations have made a 180-degree turn.

The University of Colorado Boulder Leeds Business Research division’s quarterly Business Confidence Index, released Thursday, hit its highest level ever for optimism heading into the second half of 2021 as business leaders have high hopes for the COVID-19 vaccines.

The index stood at 64.4 for Q2 2021, up from 47.9 the quarter before; 50 is considered neutral and the index stood at a record low 29.7 in the first quarter of 2020. Looking ahead to Q3, the LBCI jumps to 68.8 — the highest overall score in the 19-year history of the index. 

The quarterly report marks Colorado business leaders’ expectations for the state and national economies, industry sales, industry profits, hiring and business spending. Nearly 300 business leaders responded to the latest survey, run between March 1 and March 22, 2021.

“Business leaders are seeing what’s going on around them, and they’re reacting to that,” CU senior economist and associate dean for business and government relations Rich Wobbekind said Thursday. “… They’re looking at the fact that we’ve reopened the economy much more significantly in the first quarter and seeing industry sales expectations going up.”

More than half of respondents attributed the lion’s share of their positive outlook to the rollout of the vaccines or reduced social-distancing.

“The vaccine was the key piece, and it is triggering the desired level of optimism,” Wobbekind said.

The business benefits of the vaccine are expected to be felt in the second half of the year, according to the index report.

Despite the optimism, Colorado still lags behind the national average for unemployment rates, which in February were 6.6% in Colorado and 6.2% nationally.

“The employment numbers continue to be more muted, which I think is consistent with the K-shaped recovery some have talked about,” Wobbekind said. “Certain sectors are going to take longer to get back to full employment.”

Brian Lewandowski, executive director of the Leeds Business Research Division, added, “Yes, we do have a higher unemployment rate than the nation[al average], but we also have one of the fastest labor force growth rates in the country.”

More than 35% of LBCI participants said they expect that employment in Colorado won’t return to pre-pandemic levels until 2022.

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