Confidence Index: Colorado Business Leaders Pessimistic for Start of 2023

Stacks of $100 bills are strewn about.
Business leaders in Colorado are showing some pessimism for the first quarter of 2023. / Photo by Giorgio Trovato on Unsplash.

A recent survey of business leaders in Colorado showed pessimistic expectations for the first quarter of 2023 showing no change from the end of last year.

The Leeds Business Confidence Index, which is prepared by the University of Colorado Boulder’s Leeds Business Research Division, featured responses from more than 140 panelists to a survey last month. The survey asked leaders to weigh in on the six components of the index: the state economy, the national economy, industry sales, industry profits, industry hiring and capital expenditures. 

All six categories showed negative predictions ahead of quarter one of 2023, according to the report, with multiple concerns arising including rising interest rates and inflation. The most optimism was in industry hiring while the least was in the national economy. 

The majority of panelists also expected there to be a recession in the beginning of 2023 across the country. Nearly 58% of the respondents believed the U.S. will enter a recession in the first half of 2023 while about 22% believed it’s somewhat to very unlikely, according to the report.

“They’re clearly of the mindset that the economy is going into recession,” said Richard Wobbekind, senior economist and faculty director of the Leeds Business Research Division, during a virtual media call. “Certainly they’re experiencing what they believe to be a very slow growth scenario.”

Wobbekind also expects the economy to be slower in 2023.

“Whether or not we have a technical recession in our view is somewhat immaterial … unless, and I do want to put a caveat here, based on some unknown [factors], that the recession is far deeper than we’re anticipating,” Wobbekind said, adding there are lots of positive signs of inflation eventually coming down.

There was some good news from the panelists as 56% believed the supply chain will improve in 2023, the report indicated, adding disruptions could come from global political unrest, inflation and labor market issues. 

As of November 2022, employment recovery in Colorado has outperformed most other states, the report said. Since the previous November, employment increased by more than 103,000 jobs, but job growth is expected to slow in 2023 with the state adding a predicted 57,000 jobs. Many of the job categories could remain strong, however.

Colorado also ranked 25th in the nation for unemployment, as of November, but Wobbekind saw something positive concerning workers in the state.

“Our labor force participation rate continues to perform well above the nation, ranked second nationally and we’ve also very pleasantly seen solid job growth in all of our metropolitan statistical areas throughout the state through the November time period,” Wobbekind said. 

The survey also asked about water concerns connected with drought conditions. But only about 25% of respondents thought water would impact their business in any way in 2023, according to the report.

“In my mind, water [is] a long-term issue so I wonder if we’re asking the right question or if there’s a way to get business leaders to think a little bit more about the water issue,” Wobbekind added.

Wobbekind said some of the most significant data at the state level is that per capita personal income increased 7.9% year-over-year in the third quarter of 2022 that is first in the nation.

But the panelists still have their reservations for 2023.

“There just continues to be, I think, just too much uncertainty,” Wobbekind said. “The chief concerns that were raised by the panelists, at the top of the list, were interest rates and inflation rates.”

The numbers also indicated optimism was higher for later on in the new year. 

“You would argue they’re saying the worst is upon us right now and things are going to be getting better,” Wobbekind said. 

Information about becoming a panelist can be found here.

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