This story is courtesy of Newsteam, posted on 13 October 2011.
A recent Colorado Leeds School index suggests things may not get easier any time soon for the Colorado economy as business leaders’ confidence wanes.
The fact that the national economy is struggling is blatantly obvious. Stores are going out of business, stocks are dropping, and people are not getting hired as the unemployment rate hovers around historically high levels.
How does this translate to the local Colorado economy, which has been recently faring well compared to other states?
Nevertheless, it should come as no surprise that the ripple effect caused by a struggling U.S. economy has found its way here.
The most recently released Leeds School Business Confidence Index for quarter four of 2011 shows Colorado Business Leaders’ confidence dropped in all six economic categories.
Hiring Plans and Capital Expenditures were the two categories with the most significant decreases. According to Brian Lewandowski, a Business Research Associate at the Leeds School, this is largely due to uncertainty caused by factors such as the European debt crisis and the S&P downgrade of U.S. sovereign debt.
This also marks the first time in a year that confidence in the state economy is negative.
Lewandowski said he believes that it is too early to say what the numbers will say when the index is released again in the first quarter of 2012. He suspects that it will largely depend on consumer spending habits, which have been unnaturally conservative recently.
He hopes that great deals in the housing market, due to foreclosures, significant price drops and the upcoming holiday season will help boost confidence and increase the numbers.
While the current confidence is low and industries like finance and construction continue to bring in losses year after year, some Colorado businesses remain optimistic.
Lewandowski said this is likely due to their proximity to the Colorado economy and the fact that we’re still doing well compared to the rest of the nation.
Despite the optimism, businesses continue to cut spending and hiring new workers is a rarity. While the index is not specific to any demographic, recent college grads are feeling this the most.
The unemployment rate in Colorado is 8.5 percent and recent grads frequently find themselves battling overqualified people for entry-level positions.
Unless the students have a flawless resume with a lot of work experience, or have a connection in the job they are applying for, they are losing the battle.
As 2011 comes to a close, the only thing to do is to hope and keep your fingers crossed (especially recent grads) that the economic situation improves and jobs start to appear in time for the next Business Confidence Index in early 2012.