Colorado business leaders say they are pessimistic about the economy for the first time since 2011, according to the Leeds Business Confidence Index (LBCI) released by CU Boulder’s Leeds Business Research Division.
The LBCI has been in positive or neutral territory since the end of the recession but concerns about trade and politics has created a shaky outlook looking ahead to the fourth quarter of 2019, says economist Richard Wobbekind.
CUT 1 “The number one thing, by far, is trade policy, according to the survey respondents. They also have overall concern about politics in the country. The current condition of the economy and then, just once again, they're responding to the uncertainty out there. There’s too much uncertainty. (:18) And of course you could say the same thing about trade. It’s not necessarily the tariffs specifically, it’s the uncertainty about how’s that all going to be resolved? When is it going to be resolved?” (:26)
And Wobbekind believes this negative outlook would change if the trade issues were resolved. But, he says, it needs to happen sooner than later or we could see a drop-in consumer confidence, which could send the economy downward.
CUT 2 “So we are relying more and more on federal and state’s government spending and, particularly, on the consumer. If the consumer changes their course for whatever reason then that could really cause problems. (:14) So it’s very important that the trade uncertainty gets resolved and puts the economy—the private sector in particular—back on solid footing.” (:23)
But even with the low LBCI numbers, Wobbekind says there are some bright spots in our state economy.
CUT 3 “For the first time in nine years we actually had a slower growth in our inflation rate than the U.S did. That’s a good thing. We continue to have very stable and low unemployment rates in the state. In fact, we have the sixth lowest unemployment rate in the country, now. (:16) So all of those things, I think, you can look at as near-term positives. But the question is; If these things don’t get resolved that are out there - these uncertainties in trade issues - does the business sector really hunker down?” (:30)
The Leeds Business Confidence Index measures Colorado business leaders’ optimism and expectations for six components: the state economy, the national economy, industry sales, industry profits, industry hiring and capital expenditures.