Editorial: Region’s resiliency bodes well in event of economic slowdown
Confusion has reigned for many months about the state of the U.S. and global economies, but uncertainty appears to be dissipating — and not in a good way.
Economists and pundits have spent much of the past year predicting a downturn, but the economy thus far has defied those odds.
Back in January, Forbes magazine declared, “Global Economy Is ‘Perilously Close’ To Recession in 2023,” following up in April with, “Are We In A Recession Yet?”
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In February, U.S. News & World Report countered, “Recession Odds Recede As Labor Market, Economy Show Surprising Strength.”
Investopedia in July described “Why Some Economists Think a Recession is Inevitable in 2023.”
NerdWallet in late September asked, “Are We in a Recession?”
And, in early October, Fortune magazine stated, “A recession is still likely. Here are 6 reasons why.”
So what do business leaders in Colorado think? Respondents to a survey for the University of Colorado Boulder’s Leeds Business Confidence Index are increasingly pessimistic.
Looking forward into the fourth quarter of 2023, 222 business leaders expressed pessimism, citing high interest rates, inflation, energy prices and worker shortages as reasons for concern.
The index fell half a point to 43.6 in the third quarter. Respondents are surveyed on impressions of the state economy, national economy, industry sales, industry profits, industry hiring and capital expenditures. A score of 50 is neutral, but heading into the fourth quarter, all six components of the LBCI were on the pessimistic side of the ledger.
That’s even though the economy appears to be doing relatively well.
“So while GDP, consumption, employment and income continue to provide a positive narrative about the national economy, there are a number of headwinds that pose challenges that we’re watching very closely,” BRD executive director Brian Lewandowski said in announcing the results.
One possible reason for the increase in pessimism could be early warning signs, including slower job growth, with the state experiencing “the slowest three months of job growth since December 2020,” Lewandowski said.
Recent events back up the predictions, including layoffs at Pfizer in Boulder, downsizing by tech companies and rising office vacancy rates.
But, although the Boulder Valley and Northern Colorado won’t be immune from any potential recession, the region enjoys a remarkably diverse economy, with aerospace, agribusiness, clean tech, federal labs, government, life sciences, manufacturing, natural products, outdoor companies, software, technology and other sectors providing a healthy mix of industries, and expectations.
And Larimer and Weld counties recently accounted for half of the net population increase experienced in the state from 2021 to 2022.
So maybe the pundits are right and we are headed for a recession. But we’re located in an area that is perhaps best-poised to weather what’s to come.
