Colorado businesses are pessimistic over inflation, and many of them see a recession coming

Kevin J. Beaty/Denverite
Greg Fisher scans inventory in Wheel Pros’ Denver supply warehouse. Oct. 27, 2021.

Colorado business leaders are feeling pessimistic, with more than half of those surveyed for the latest Leeds Business Confidence index anticipating a recession next year.

Nearly a quarter of those surveyed said a recession has already started, according to the quarterly report from the University of Colorado’s Leeds School of Business. The survey includes responses from 216 participants polled from June 1 to June 20.

There is little evidence that economic growth is actually stalling, and Colorado is still adding jobs. But businesses and consumers alike are feeling the pinch as inflation takes a bite out of spending power, leading to a sour reading on the economy.  

“Inflation was by and large the greatest concern,” said Richard Wobbekind, a senior economist and faculty director of the business research division at CU, in a report accompanying the index.

More than half of respondents said they plan to raise prices to combat inflation, while more than 40 percent plan to cut expenses. 

Other factors weighing on business sentiment include snags in the supply chain, persistent worker shortages and higher interest rates.More than half of those surveyed said they expect to increase wages to attract more workers.

The state’s business leaders report feeling far more gloomy about prospects for the national economy, however, relative to Colorado’s economy.