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Colorado businesses more confident looking ahead to second quarter, survey finds

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Robert Davis | The Center Square

(The Center Square) – Colorado businesses are more confident looking ahead to this year's second quarter, largely due to positive news about the COVID-19 vaccine and the hopes of getting the economy back to full steam, a recent survey found.

The Leeds School of Business at the University of Colorado Boulder conducted the survey, which is meant to capture “Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditures,” the school said Monday.

Known as the Leeds Business Confidence Index (LBCI), the survey found business confidence rose in only two of the six metrics from the fourth quarter of 2020 going into the first quarter of 2021. Business leaders remain optimistic about hiring and capital expenditures, even though overall confidence remained unchanged.

Looking ahead to the second quarter, all six components of the LBCI point to positive territory. That optimism is largely driven by the COVID-19 vaccine, the increasing health of the state economy, and industry sales. Overall, the LBCI is almost 12 points higher for 2021's second quarter than the first quarter.

However, business leaders remain pessimistic about the short-term state economic outlook, state capital expenditures, and expected profits in the year's first quarter, the survey found.

Colorado’s unemployment numbers are one figure weighing heavily on opinions about the future. During the week of Christmas, Colorado’s Department of Labor and Employment received over 25,000 new unemployment claims, the most since the week ending on May 2.

Local relief programs have given business leaders reason to believe greener grass is on the horizon. During the 2020 special session, lawmakers passed a nearly $300 million spending package that included $57 million for small businesses.

The U.S. Small Business Administration (SBA) also announced on New Year’s Eve that the agency will continue providing Economic Injury Disaster Loans (EIDL) to qualified businesses. Small business loans are offered at a 3.75% interest rate while nonprofit organizations qualify for a 2.75% interest rate. Both loans carry 30-year maturity terms.

To date, the SBA has approved over $197 billion in EIDL loans.

“Following the President’s declaration of the COVID-19 Pandemic, the SBA has approved over 3.6 million loans through our Economic Injury Disaster Loan program nationwide,” EIDL Administrator Jovita Carranza said in a statement. “The EIDL program has assisted millions of small businesses, including non-profit organizations, sole proprietors and independent contractors, from a wide array of industries and business sectors, to survive this very difficult economic environment.”