Business leaders remain pessimistic ahead of the third quarter of 2023, according to the Leeds Business Confidence Index.
The report, released in late June by the Leeds Business Research Division at the University of Colorado Boulder’s Leeds School of Business, featured 191 panelists including business leaders, who responded to a survey from June 1-20. The report indicated the pessimism was connected to interest rates, inflation and concerns about a recession.
The report focused on state business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans and capital expenditures. All six of those areas showed negative perceptions ahead of the third quarter with the index being lowest on the national economy and highest for industry sales, the report noted.
Overall, the survey indicated mixed expectations for the state and national economy. According to the report, 44% of respondents were neutral on the state’s outlook while 37.7% projected a moderate to strong decrease while 18.3% thought there could be an increase. Nationally, more than half of respondents were projecting a decrease while 17.3% projected an increase.
The report added fewer respondents believed the U.S. will enter a recession in 2023 compared with the last quarter (42.9% against 56.9%). It added Colorado’s employment recovery outperformed most states, increasing 2.8% above the pre-recession peak as of May 2023, putting Colorado 18th nationally. The U.S. improved 2.5% above pre-recession levels as of May, according to the report.
The report noted Colorado’s per capita personal income increased 5.3% year-over-year in quarter four of 2022, putting the state 28th nationally. In that same time period, personal income increased 5.9%, putting Colorado 27th nationally. The report indicated personal income growth is expected to be 7.1% in 2023.
Year-over-year employment growth in Colorado increased 1.1% in May of 2023 and the forecasting model has the state’s employment growth slowing down to 1.8% in 2023, after a 4% growth in 2022, according to the report.
As for a recession, that too was a mixed bag.
“Recession expectations decreased ahead of Q3 2023 with 42.9% of respondents indicating expectations of a recession in 2023 (12% indicated the U.S. is already in a recession and 31% expect one in the second half of the year),” the report said. “Expectations for a 2024 recession increased from 7.9% to 19%, and 16.8% project the recession after 2024 (21.2% are uncertain).”
The panelists added the most pressing issues concerning the Colorado economy were housing costs, politics and labor. One of the more significant labor concerns panelists saw was hiring skilled workers.