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News Room: Industry News

Colorado business-outlook index hits 2-year high

Monday, June 17, 2013   (0 Comments)
Posted by: Julie Herman
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June 3, 2013 

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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