The Leeds Business Confidence Index reported Colorado business leaders’ optimism dropped to its lowest point in the index’s recorded 17-year history, primarily because of the coronavirus outbreak.
Despite decreased confidence, state business leaders are still expecting the state economy to outperform the national economy during the next six months.
The quarterly report is produced by the Leeds Business Research Division at the Leeds School of Business at the University of Colorado-Boulder. It records Colorado business leaders’ expectations for state and national economies, industry sales, industry profits, hiring rates and business spending.
More than 400 business leaders responded to the latest survey, which ran between March 1 and March 20.
An index score of 50 indicates a neutral outlook. The second quarter of 2020 received an overall score of 29.7. All six categories fell below 50, with the national economy having the lowest outlook at 21.8. The state economy received a score of 28.8.
Industry sales had a score of 32.9, industry profits had a score of 31.5, industry hiring had a score of 32.4, and capital expenditures had a score of 31.0.
In the first quarter of 2020, the overall score was 50.8 with a state score of 51.5 and a national score of 45.9.
“The survey reflects the rapid deterioration of the economy and how business leaders are digesting the early days of this worldwide crisis,” Brian Lewandowski, Leeds Business Research Division executive director, said in a press release. “Our survey also took place before the latest batch of economic data, which doesn’t look very promising.”
The majority of panelists pointed to coronavirus for their pessimism, with 86 percent citing the pandemic. Other factors included the overall economy, upcoming election and oil market.
Panelists were more optimistic with the state economy for the upcoming quarter. The third quarter currently has a score of 28.8. They cited hiring and business spending, also known as capital expenditures, as primary factors.
They expect the national economy to also rebound somewhat with a current third-quarter 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.”