Colorado’s economy continued to expand in August, although it slowed slightly since July, according to a survey released today.
The Goss Business Conditions Index, based on a survey of Colorado supply managers, was a healthy 53.8 in August, although it declined from July’s 54.2.
July’s index of 54.2 was down from June’s 54.4.
“Energy extraction firms have added significantly to their workforce, gaining back jobs lost to the recession,” said Ernie Goss, who conducted the survey. “Durable goods manufacturers in the state benefitting from exports continue to expand in the state, adding jobs for new workers and increases in work hours for current employees.”
An index value greater than 50 indicates economic expansion, while a value lower than 50 indicates contraction.
However, business confidence took a hit.
Goss said that in the three-state Mountain Region of Colorado, Utah and Wyoming, the confidence index among supply managers slumped to 44.5 from 50.1 in July.
“The uncertainty surrounding the federal government and Federal reserve actions have dampened the economic outlook of supply managers in the region,” said Goss. “Our confidence index has now moved to levels experienced during the last recession.”
Components of the Business Conditions Index in Colorado for August had new orders at 54.0, production or sales at 50.6, delivery lead time at 50.1, inventories at 45.9 and employment at 68.5.
Goss said for the 22nd straight month, the overall index for the Mountain States region of Colorado, Utah, and Wyoming, advanced above the neutral 50.0.
The index for the Mountain States region was 56.8 for August, a dip from 57.4 in July.
“While growth is likely to slow slightly due to the slowing of the U.S. economy, our survey results indicate that a strong energy sector and a stabilizing housing market are positively influencing the regional economy,” said Goss.
He said the survey asked supply managers what the expected sales growth was for their company for the rest of 2011.
Approximately 14.3 percent expect a decline in business activity, 33.4 percent anticipate an upturn in sales, and the remaining 52.3 percent expect no change in business activity for the rest of 2011.
Goss said that August employment in the three-state region has been strong.
However, he cautioned that he expects the pace to slow as the national slowdown begins to reduce regional growth.
“Readings over the past several months are consistent with annual job growth above a healthy two percent,” he added.
Goss said regional export orders index expanded to a healthy 57.2 from July’s 54.2. Goss said the weak U.S. dollar makes U.S. products more competitively priced abroad which continues to support exports.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com.
