Economic pessimism persists among Colorado’s businesses, even as unemployment and GDP outpace expectations

Hart Van Denburg/CPR News
A Denver Police motorcycle parked on the 16th Street Mall in Denver, Wednesday, Sept. 14, 2022, by a storefront for rent under the Denver Pop-Up program.

Colorado’s business leaders are stuck in a glum mood about the economy’s prospects for the year ahead.

More than half of respondents to the Leeds Business Confidence index think the U.S. will enter a recession in the first half of 2023. The index is a quarterly survey of business leaders that is conducted by economists at the  University of Colorado’s Leeds School of Business. Inflation and rising interest rates are the leading concerns of those surveyed.

The economic forecast feels dim even though the job market is solid — the state’s unemployment rate is 3.5 percent — and other indicators, such as gross domestic product, are stronger than had been anticipated a year ago. The state’s business leaders appear to be looking at their own internal numbers and seeing a slowdown, however, even if the broader data isn’t showing it yet, said Richard Wobbekind, senior economist and faculty director of CU’s business research division.

“There just continues to be, I think, just too much uncertainty,” Wobbekind said during a conference call with reporters Wednesday.

Respondents are feeling pessimistic about nearly all the indicators included in the index, such as sales, profits, hiring and capital expenditures. Indeed, more than half had a negative sales outlook for the first quarter of 2023.

“So definitely, in terms of sales, not pretty,” Wobbekind said. “Businesses are looking at the environment that they’re in and suggesting… weaker sales and weaker profits.”

On a positive note, more than half of respondents expect the supply chain problems that have wreaked havoc on U.S. businesses and consumers since the start of the pandemic will continue to ease in 2023.