Colorado business leaders’ outlook on the economy has turned negative heading into the fourth quarter of 2011, according to an updated of the University of Colorado Boulder Leeds School of Business economic forecast released today.
Confidence in the state economy turned negative for the first time in a year, with the index dropping from 51.2 to 49.0, while the national index dropped further into negative territory falling from 44.0 to 40.4, the lowest level since 2009, according to the report.
An index reading greater than 50 indicates positive expectations, while an index lower than 50 indicates negative expectations.
Richard Wobbekind, University of Colorado Leeds School economist who conducted the survey, said confidence decreased in all six economic categories measured by the index.
In addition to confidence in the state economy, the categories measured are: national economy, industry sales, industry profits, hiring plans and capital expenditures.
The overall index for the fourth quarter posted a reading of 47.3 down from 51.6 in the third quarter, according to Wobbekind.
“Unfortunately, this quarterly index is reflecting the uncertainty in the overall economy,” said Wobbekind.
Wobbekind said several factors are feeding the economic uncertainty including employment reports released for August showing zero growth for the nation and negative growth for Colorado. He added that in addition “the housing markets has continued to bump along the bottom,” with foreclosures rising.
“If that isn’t enough, we throw a little sovereign debt and the uncertainty of resolving that issue in Europe and we wind up with a lot of uncertainty in the economy, a declining stock market and confidence really dropping,” he said.
Hiring plans led the decrease among the six categories surveyed, dropping from a reading of 52 in the third quarter to 46.8 in the fourth.
The sales and profits expectations for business leaders both dropped, with the sales index dropping from 55.8 to 51.2, and the profit index falling from 53.1 to 49.5. Expectations for capital expenditures also dropped with the index falling from 53.4 to 46.7.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com.
