Leeds Business Confidence Index reports overall positive expectations, but cooling optimism ahead of Q4
The Leeds Business Confidence Index (LBCI) fell ahead of the fourth quarter of 2017, reflecting lower expectations for both the end of the year and the first quarter of 2018 despite all individual components of the index remaining in positive territory. The overall index came in at 56.5 for Q4 2017 and 55.3 for Q1 2018 (Note: an index value of 50 equals neutral).
The report, which is prepared by CU Boulder’s Business Research Division at the Leeds School of Business, captures Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans and capital expenditures. A total of 284 qualified panelists responded to the survey.
For the second consecutive quarter, the LBCI’s overall outlook remained positive even as expectations cooled for individual indicators. The index fell 3.2 points from last quarter, but still remained higher than last year’s figure, gaining 3.5 points from Q4 2016. Panelists’ expectations were weakest for the national economy, but were buoyed by stronger expectations for the state, industry sales and industry profits.
“We are seeing a larger decline in optimism about the national economy than we are about the state economy,” said Richard Wobbekind, Executive Director of the Business Research Division. “The state economy is still considered healthy and a larger percentage of respondents believes it is expanding rather than contracting.”
The LBCI reflected modest declines in expectations across a number of economic indicators. Sales and profit expectations ranked among the highest of the six survey components, but both still slipped ahead of Q4 2017. Capital expenditures and hiring also fell as growth expectations slowed.
Colorado’s job market remained a bright spot as the state continued to exhibit strong employment growth. Jobs increased 1.8 percent year-over-year in August 2017, the 14th-fastest rate in the country. Meanwhile, the state unemployment rate continues to outperform the nation as a whole, coming in at just 2.5 percent.
Colorado’s low unemployment rate, however, could make it difficult for employers to fill vacant or new positions, leading more than one-quarter of survey respondents to name it their top economic concern. Housing was the second most frequently mentioned issue, specifically high real estate prices and a lack of affordable housing that could discourage potential employees from relocating to Colorado.
For more information and to read the full report, visit the Business Research Division.