(The Center Square) – The Colorado business community has increased confidence levels heading into the second quarter of 2024, according to a report from the Leeds School of Business at the University of Colorado.
All six components of the organization’s quarterly index – sales, profits, hiring, capital expenditures and the state and national economies – moved into positive territory ahead of the start of the second quarter of the year. All six categories increased compared to the previous quarter.
At the same time last year, five of the six categories were in negative territory and it marked the third-longest period of pessimism in the 20-year history of the report. The index increased from 45.3 last quarter to 53.7 in the current report, the first time in two years it rose above the neutral index number of 50. The score is also above the long-term average.
“The discussion of politics was predominantly related to the upcoming election and its potential impacts, but it also included perspectives on a variety of government policies,” according to the report. “Responses on inflation, interest rates, and general economic conditions had a relatively even distribution of positive and negative sentiments and the increase of responses related to uncertainty (10%) were mostly connected to the election, but also considered global conflicts, inflation, and interest rates. Responses on recessionary concerns (5%) were minimal, underlining the trend of diminishing fear related to a potential recessionary period.”
The sales component increased 11.9 points, from 46 to 57.9, and profits increased 11.1 points, from 45.4 to 56.6. The report said the “strength of the consumer” contributed to the high rating of sales and profits.
“Individuals with a positive sales outlook (44.4%) outweighed those with negative perceptions (15.7%), while 39.9% remained neutral,” according to the report. “Profits expectations had a similar distribution – the positive perceptions outweighed the negative, 41% to 16.3% (while) 42.7% remained neutral.”
The report said personal consumption expenditures increased at an annualized rate of 3.3% compared to the fourth quarter of 2023. However, the national rate of personal income increased 4.7% in the fourth quarter of 2023, compared to the previous year. Personal income in Colorado increased 4.8% in the same period.
Inflation in the Denver-Aurora-Lakewood metropolitan statistical area declined to 3.5% in January but remained above the national average of 3.1% for U.S. cities, according to the report. Inflation is projected to remain above 3% in the Colorado region during 2024.
Employment in Colorado grew 2.5% or 72,700 jobs in 2023, according to the report. Colorado’s gross domestic product increased 3.2% during the fourth quarter of 2023 compared to the previous year while the national rate increased 3.1% during the same period.
The report was based on 178 qualified panelists responding to a survey during the first 20 days of March.
