According to the Leeds Business Confidence Index (LCBI), Colorado business leaders expressed caution ahead of Q1 2019. After a notable dip ahead of the fourth quarter, Q1 saw the 10th largest quarterly drop and 5th-largest annual drop in confidence in the 64 quarters the Leeds School has conducted this survey. The Q1 reading is the lowest since Q4 2011.
However, the Q1 negative outlook is isolated to the national economy with the other components of the index lower but positive. Overall, the index stayed in positive territory.
The LBCI reports Colorado business leaders’ expectations across six components: national economy, state economy, industry sales, profits, hiring plans, and capital expenditures. The LBCI has been compiled by the Leeds Business Research Division for the past 16 years.
When it comes to the state economy, which generally reaccelerated in 2018, softer growth is projected for 2019. Colorado continues to experience employment growth, real GDP expansion, increasing personal income, and growth in other macroeconomic factors. Most surveyed business leaders also expressed no impact from the state’s rising minimum wage, now $11.10 as of Jan 1, 2019.
Consumer confidence also remains high and has been at the highest levels since 2000. Personal consumption expenditures continue to exhibit strength (up 4% SAAR in Q3), and retail sales are up 5.4%.
As Executive Director of Leeds Business Research Division, Richard Wobbekind told CU Boulder Today, “We just came through the holiday season with really strong retail sales. The employment numbers are still very strong. The unemployment rate is still low. GDP growth for the fourth quarter will end up being a very solid number. I don’t think you can look at anything related to the real economy, other than perhaps housing, and say, ‘It’s really slowing down.’ There is plenty of spending power out there.”