Business confidence in Colorado is surging and has turned positive for the first time in two years as concerns over inflation and recession ease, according to the Leeds Business Confidence Index from the University of Colorado Boulder.
Looking ahead to the second and third quarters, the 178 panelists surveyed reported a positive outlook for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditure. That hasn’t happened since 2022, when high inflation came to dominate the headlines.
A score above 50 indicates a positive outlook, while one below 50 a negative one. The overall index increased from 45.3 in the first quarter to 53.7 for the second quarter and 53 for the third. All six categories in the index increased year-over-year and remained in positive territory.
When asked to explain their improved outlook, respondents cited general economic conditions, politics, including the upcoming election, and interest rates.
Colorado business leaders were more optimistic about the outlook for the Colorado economy, 54.1, than they were about the U.S. economy, 51. They were most optimistic about industry sales, which scored a 57.9.
Business optimism can lead to higher spending and more hiring. The index for hiring plans went from 45.3 in the first quarter to 50.1 in the second and third quarters.
Inflation isn’t gone completely, with consumer prices up 3.5% year-over-year in the Denver-Aurora-Lakewood area in January, according to the U.S. Bureau of Labor Statistics. It is expected to run above 3% this year, according to a separate forecast from the CU Boulder’s Business Research Division.
Early last year, many economic forecasts predicted that higher interest rates from the Federal Reserve could tip the economy into a mild recession, but job growth held up, with Colorado adding 72,700 jobs in 2023, which represents a growth rate of 2.5%.
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