Colorado business-outlook index hits 2-year high

By Mark Harden (News Director – Denver Business Journal)
A monthly index of expected Colorado business activity from Denver economist Ernie Goss rose in May to its highest level in two years, with Goss citing the improving construction sector.
Goss’ monthly Business Conditions Index for the state was 62.8 in May, the highest level since May 2011.
That reading was up from 58.2 in April, 60.8 in March and 58.9 in February. (See the table at the end of this report for index readings since July 2009).
The index — based on a monthly survey of business supply managers in the state — ranges from 0 to 100. An index reading greater than 50 indicates expectations of an expanding economy over the next three to six months; 50 is “growth neutral” and below 50 is considered negative.
“Businesses tied to the state’s rapidly advancing construction industry continue to experience very healthy business conditions,” Goss said.
He added that “new orders and production are growing faster than jobs in [Colorado’s] manufacturing sector. To accommodate this growth, manufacturers in the state are expanding the hourly work week for current employees much faster than jobs.”
Goss is director of the Denver-based Goss Institute for Economic Research and research director of Creighton University’s Economic Forecasting Group.
The overall index averages individual readings for new orders, production or sales, employment, inventories and delivery lead time.
Goss said that his Colorado index for last month broke down this way (with indexes for recent months given):
New orders: 59.1 (55.8 in April, 57.3 in March, 60.0 in February, 53.3 in January).
Production/sales: 52.8 (55.6 in April, 62.3 in March, 49.6 in February, 49.3 in January).
Delivery lead time: 74.5 (49.1 in April, 63.6 in March, 68.4 in February, 53.4 in January).
Inventories: 72.7 (70.3 in April, 65.7 in March, 56.3 in February, 62.7 in January).
Employment: 55.0 (59.9 in April, 54.5 in March, 58.9 in February, 51.2 in January).
Goss also released a three-state Business Conditions Index that covers Colorado, Utah and Wyoming combined.
Across the three-state region, the index rose to 61.0 in May from 58.3 in April, 56.2 in March, 54.9 in February and 54.8 in January.
“Durable and non-durable goods manufacturers in the region, particularly those linked to the region’s rapidly expanding construction industry, pushed the overall index higher. [And] even though agriculture prices have softened recently, companies with ties to agriculture continue to experience healthy but somewhat reduced economic growth,” Goss said of the three-state area.
The Goss Institute uses the same methodology for its survey as the Institute for Supply Management in its national survey of its members.
Goss is Jack A. McAllister Chair in Regional Economics at Creighton University in Omaha.
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GossBusinessConditionsIndexforColorado
Here are Colorado Business Conditions Index monthly readings for recent years:
62.8 in May 2013.
58.2 in April 2013.
60.8 in March 2013.
58.9 in February 2013.
54.4 in January 2013.
53.8 in December 2012.
54.9 in November 2012.
56.7 in October 2012.
53.3 in September 2012.
59.0 in August 2012.
49.6 in July 2012 (the first negative reading since September 2009).
58.6 in June 2012.
55.7 in May 2012.
58.9 in April 2012.
61.4 in March 2012.
59.1 in February 2012.
57.5 in January 2012.
59.6 in December 2011.
56.2 in November 2011.
53.3 in October 2011.
51.9 in September 2011.
53.8 in August 2011.
54.2 in July 2011.
54.4 in June 2011.
62.9 in May 2011.
53.8 in April 2011.
59.7 in March 2011.
57.1 in February 2011.
54.9 in January 2011.
58.1 in December 2010.
53.7 in November 2010.
53.3 in October 2010.
50.6 in September 2010.
53.0 in August 2010.
56.2 in July 2010.
68.4 in June 2010.
56.8 in May 2010.
73.5 in April 2010 (the highest reading since the recession began).
57.0 in March 2010.
58.8 in February 2010.
56.2 in January 2010.
62.8 in December 2009.
70.3 in November 2009.
65.5 in October 2009.
48.7 in September 2009.
47.5 in August 2009.
51.1 in July 2009.
Before July 2009, Colorado’s index was below 50 every month back to September 2008.