Business orders, production of sales, employment and inventories in the Mountain States are treading slightly above growth neutral this summer but it seems confidence is slipping.
About 33 percent of supply managers surveyed in Colorado, Utah and Wyoming say they expect an upturn in sales for the rest of 2011 while 14 percent expect a decline and 52 percent expect no change. At the same time, economic optimism, captured by the confidence index, slumped to 44.5 from 50.1 in July.
“The uncertainty surrounding federal government and Federal Reserve actions have dampened the economic outlook of supply managers in the region,” said Dr. Ernie Goss, director of the Denver-based Goss Institute for Economic Research. “Our confidence index has now moved to levels experienced during the last recession.”
For 22 straight months, the Business Conditions Index for the Mountain States region — a leading economic indicator for the three-state area of Colorado, Utah and Wyoming — advanced above growth neutral, which is 50, but still slipped from last month’s index, according to the institute’s survey. The overall index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time.
In the Mountain States region, the Business Conditions Index, which ranges from 0 and 100, slipped to 56.8 from 57.4 in July.
“While growth is likely to slow slightly due to the slowing of the U.S. economy, our survey results indicate that a strong energy sector and a stabilizing housing market are positively influencing the regional economy,” Goss said.
In Colorado, the state’s leading economic indicator, dipped slightly for August to 53.8 from 54.2 in July.
“Energy extraction firms have added significantly to their workforce, gaining back the jobs lost to the recession,” Goss said. “Durable goods manufacturers in the state benefiting from exports continue to expand in (Colorado), adding jobs for new workers and increases in work hours for current employees.”
The next Business Conditions Index report is due in October.