Colorado biz leaders’ confidence strikes 2-year high

BOULDER — Business leaders in Colorado are more confident in the state and national economy than they have been in two years.

The Leeds Business Confidence Index, a metric calculated by University of Colorado economists, rose from overall pessimism to optimism looking ahead to the second quarter of 2024. This marks the first time since the early months of the post-COVID-19 pandemic recovery era that the state’s business leaders have felt positively about the near-term economic outlook.

“The responses were very strong this time around,” CU economist and Leeds Business Research Division faculty director Rich Wobbekind said. The LBCI results are “very consistent with the soft-landing mentality (and) a better inflation environment. … Businesses are feeling better about not going into a recession and (there are) expectations about a more positive interest rate environment.”

The LBCI figure increased from 45.3 in the first quarter of the year to 53.7 for the second quarter. An index score — which is based on impressions of the state economy, national economy, industry sales, industry profits, industry hiring and capital expenditures — of 50 is neutral. 

“Every component of the Leeds Business Confidence Index increased ahead of Q2 2024, and all components moved into positive territory,” according to CU economists. “Across the array of reasons given to explain their outlook, general economic conditions, politics, and interest rates were commonly cited as the most pressing factors.”

In Colorado, “job growth remains relatively solid, but it has been heavily concentrated” in sectors such as government, hospitality and health care, Wobbekind said. And while the Centennial State is no longer a national frontrunner for job growth as it had been in the past, “this is more of a supply constraint in terms of our employment growth than it is a lack of demand for workers. We see plenty of demand.”

The national unemployment rate increased two-tenths of a percentage point to 3.9% in February, but business leaders appear not to be panicking about the upward trend. The jobless rate is at its highest mark since 2022, “but in long-term historical context 3.9% is still a very, very attractive number, Wobbekind said. 

Looking ahead to the third quarter of 2024, the LBCI remains positive at 53 points, reflecting ongoing, although fairly temperate, optimism.

This story has been updated with additional commentary from University of Colorado economists.

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