Leeds Business Confidence Index, Q2 2011
The Leeds Business Confidence Index (LBCI) is a forward-looking index that gauges business leaders’ opinions about national and state economic trends and how their industry will perform in the coming quarter.
Each quarter, Colorado business leaders are invited to complete a brief online survey about next-quarter expectations. The survey results are then compiled into the LBCI.
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As Colorado enters the second quarter, confidence continues on a positive slope. The Leeds Business Confidence Index (LBCI) measures the confidence of Colorado business leaders in six categories: national economy, state economy, industry sales, industry profits, hiring plans, and capital expenditures. The LBCI's reading of 56.8 is the highest level since Q2 2006.
For the second consecutive quarter, all metrics are above the neutral mark (50). While confidence in the state and national economies has leveled, expectations for sales, industry profits, hiring plans, and capital expenditures all recorded aggressive gains. The greatest positive change is to hiring plans, which grew from 52.5 in Q1 to 56.3 in Q2.
In addition to the expectations questions, panelists were asked how Colorado should face an estimated $1 billion budget shortfall for FY 2011-2012. What share should be achieved through spending cuts, and what share should be achieved through tax increases? On average, respondents allocated 29% of the budget balancing burden to increased taxes and 71% to spending cuts.