Colorado business leaders — including those in Colorado Springs — are optimistic about the future at the start of the third quarter — but slightly less optimistic than this time last year.
That’s the news from the latest business confidence index from the University of Colorado Boulder, which shows that expectations for the third and fourth quarters of 2016 have dipped below 2015 levels.
““The state has been experiencing a slowdown in growth,” said study author Richard Wobbekind, executive director of the Leeds School’s Business Outreach Division. “If you look at the year-over-year growth compared to last year or last year compared to the year before we really are two years in a row of slowing employment growth in the state. Around the energy sector, that’s where we’re seeing significant job losses.”
Expectations for the third quarter are still positive for every metric — except for the one that measures confidence in the national economy. Other ratings cover state economy, industry sales, industry profits, capital expenses and job growth.
“If you look at the state as a whole we are generating jobs in every sector except natural resources and mining — the energy sector,” he said. “And I think that broad-based growth is obvious in terms of technology growth and leisure and hospitality sector is doing very well. Health care is doing well. So we look around and see a lot of sectors that are doing well. State and local government finances are in good shape.”
Colorado’s unemployment level is lower than the national level, but increased to 3.4 percent in May from a 16-year low in March of 2.9 percent. The national unemployment rate is 4.7 percent. In Colorado Springs, employment rose by 2.7 percent from February 2015 to February 2016, and shows gains of 2.5 percent from May of last year to May 2016.
Top business concerns: the pending election, commodity and energy prices and interest rates, Wobbekind said.
“We asked: ‘What are your greatest concerns?’ And far and away the political election was the biggest concern amongst the business leaders,” he said.
But that was before the referendum last week in the United Kingdom, where voters opted to leave the European Union, he said.
“The two pieces that we’d be most concerned about going forward is the value of the dollar vis a vis what’s going on in Europe,” he said. “If the dollar strengthens a lot more how does that impact the Colorado ag sector? How does that impact exports in general? So it’s going to continue to weigh on us. And then the second piece is just the psychology of what’s going on in the stock market right now and how long that lasts and will that cause consumers to hunker down a little bit and be a little bit more cautious in their spending.”
At a Women on the Move, a nonprofit that seeks to help women who own small businesses, Tatiana Bailey, executive director of the Southern Colorado Economic Forum at UCCs, echoed Wobbekind’s analysis.
“We’re doing very well,” she told the crowd. “I think we’ll see the economy grow well into 2017. There are concerns about interest rates, but the Federal Reserve opted not to raise them after the jobs report was lower than expected. There will probably be a rate hike in December.”
But overall news for the region was positive: The amount of time jobs are posted has dropped from 70 days to 44 days. And for the first time since before the Great Recession, companies in Colorado Springs are hiring more people than those who are seeking jobs. Housing prices are up — the average home in Colorado Springs is $293,000 — and sales inventories are at record lows, she said.