Colorado’s business leaders are optimistic about the coming months as the COVID-19 vaccine rollout continues and the state relaxes restrictions, according to the latest Leeds Business Confidence Index survey.
“As more people are vaccinated, as we reach herd immunity, as the alert levels go down across Colorado counties and businesses are allowed to reopen that that's really where the surge of job growth will come from,” said Brian Lewandowski, executive director of the Leeds Business Research Division. “It's the rehiring of a lot of those workers in those key tourism industries, that's where most jobs have been lost, so that's really the greatest potential for adding jobs back and adding jobs back quickly.”
The index surveyed 278 members of the business community who rated their confidence level entering the second quarter of 2021 as 64.4 out of 100 — a rating higher than 50 indicates optimism. That’s a big bump from the 47.9 rating that was reported in January for the first quarter of the year.
One-third of respondents cited the pace of vaccinations as the main driver for their outlook, while one-fifth pointed to the easing of social distancing restrictions around the state.
The survey reflects Colorado business leaders’ expectations for the state and national economies, industry sales, industry profits, hiring and business spending. Confidence in the state economy showed the strongest gains, increasing from 46.9 to 68.3. The national economy ranked slightly lower with 65.7.
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Business leaders who responded to the survey represent every industry in the state, but professional, science and technical services represented the largest percentage of respondents, followed by finance and insurance.
One year ago in March 2020, optimism was at its lowest level in 17 years thanks to the COVID-19 pandemic. Since then, the rebound has been steady but slower than was initially forecast.
While confidence is increasing, 35 percent of businesses suspect job recovery will lag. Colorado’s employment remains down compared to pre-pandemic levels. Employment rates in the state are down 5.6 percent compared to the same time last year, reflecting 156,700 fewer jobs. The current unemployment rate is 6.6 percent, and the national unemployment rate is 6.2 percent.
“Certain sectors are going to be slower to get back to full employment. Some of those jobs have been automated away during the pandemic. So we do see the employment situation taking a lot longer,” said said Richard Wobbekind, senior economist at the Leeds School of Business. “Over half stated they wouldn't get back to employment levels until 2022 or beyond.”
All seven of the state’s metropolitan areas saw employment fall. The two hardest hit areas were Greeley, which saw a 7.8 percent decrease, and Boulder, which had a 7.6 percent decrease. The heaviest losses by industry were mining and logging at 27.5 percent and hospitality at 20.9 percent.
Looking ahead to the third quarter, expectations rose to a record 68.8 — the highest overall score in the 19-year history of the index. Four of the six components the survey looks at were at an all-time high. The survey coupled the results with comments from businesses and say it signals the end of the pandemic recession.