Optimism about Colorado's economy slipped ahead of the second quarter 2022 but still remained positive, according to the latest edition of the University of Colorado Boulder’s Leeds Business Confidence Index (LBCI).
Released by the Leeds Business Research Division (BRD) at the Leeds School of Business, the Index decreased 4.1 points to 53.9 ahead of the Q2 2022 (a score of 50 is neutral), and dropped another 0.6 points ahead of Q3.
Colorado business leaders cite impacts of the Russia-Ukraine war and inflation as the primary concerns, with COVID-19, supply chain issues and energy prices also top of mind.
While optimism decreased, five of the six components of the LBCI recorded positive perceptions––with only the national economy recording a negative perception, dropping 10 points to 40.4.
State economic expectations dropped 5.7 points ahead of Q2 (51.9). The gap between the state and national outlook widened to 11.5 points, the greatest gap in nine years.
Industry hiring recorded the highest optimism for the second consecutive quarter (60.4).
“Colorado's employment surpassed the prerecession peak in February of this year,” said Rich Wobbekind, senior economist and faculty director of the Business Research Division. “The state's employment recovery has outperformed the nation, and six of Colorado’s seven metropolitan statistical areas rank among the top 100 nationally for employment growth.”
Unemployment in Colorado improved to 4% in February 2022, ranking 28th in the country. The national unemployment rate in February 2022 was 3.8%.
Colorado personal income grew 8.6% year-over-year in Q4, ranking the state 7th.
Inflation continues to impact Colorado businesses. A majority of the 195 survey respondents (92.8%) noted inflation issues impacting their business. More than 55% of respondents expect to increase wages in response to higher inflation, and most expect inflation to moderate in 2023 (59.3%).
Looking ahead to Q3 2022, business leaders anticipate the the LBCI to remain positive overall (53.3), with further drops in capital expenditures and industry sales, profits and hiring.