(The Center Square) – A survey of Colorado’s business leaders revealed their confidence is “tempered but positive” going into the third quarter of the year.
The Leeds Business Confidence Index, a report from the University of Colorado’s Leeds School of Business, found all measured components posted year-over-year gains heading into the second half of the year, but all components slipped from the second quarter of this year heading into the upcoming third quarter. The index examines the national and state economy, industry sales, profits, hiring plans and capital expenditures.
“Across the array of reasons given to explain their outlook, interest rates, election uncertainty, and sentiment were commonly cited as the most pressing factors,” according to the report.
The report stated 26% of those surveyed said interest rates are the reason for their outlook, 21% said election uncertainty and 17% said their overall outlook was forming their sentiment.
A rating of 50 on the index indicates a neutral outlook and Colorado had a 50.6 rating for the third quarter compared to a 53.7 rating at the beginning of the second quarter.
“Looking out to Q4, three of the six indicators remained in positive territory, and two components increased quarter-over-quarter,” according to the report.
Four of the six areas had positive index perceptions: state economy (51.2), industry sales (54.7), industry profits (52) and capital expenditures (52.2). The two with negative outlooks were the national economy (46.8) and industry hiring (48).
“Despite increasingly positive sentiment among consumers, some respondents expressed negative expectations due to concerns about repressed demand resulting from tightening monetary policy and inflationary shocks,” the report concluded. “However, worries about a recession were minimal. Optimistic respondents highlighted increasing price stability (5%) and economic growth (9%) as positive signs for the future.”
“While the general political discourse primarily focused on the upcoming election, there was also some discussion about government regulation, fiscal policy, and the current geopolitical climate,” the report stated. “The general outlook among respondents was slightly positive, with 10% expressing optimism for the future and 7% expressing pessimism. Many attributed their sentiment to consumer confidence and demand, swaying in both positive and negative directions.”
Inflation in the Denver-Aurora-Lakewood metropolitan statistical area improved to 2.6% in May, compared to 3.3% for the average U.S. city. Employment grew 1.9% or 55,400 jobs compared to last May, ranking Colorado 15th in the nation.
Personal income increased 4.8% in Colorado during the first quarter of 2024 compared to the previous year, ranking the state 14th. Per capita personal income increased 4.2% during the same period, ranking Colorado 16th.
Colorado’s gross domestic product growth was higher than the national rate. During the first quarter, Colorado’s GDP increased at an annualized rate of 2.3% and 3.3% compared to last year. The national GDP rate was 1.4% for the first quarter and 2.9% compared to the previous year.
A total of 201 qualified panelists responded to the survey from June 1-20.
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