Pessimism is taking hold amongst Colorado’s business leaders as the year goes on

Downtown Denver commercial real estate Republic Plaza skyscraper
Clouds gather over Republic Plaza in downtown Denver.

Despite a robust job market and signs that inflation is cooling, the state’s industry executives can’t shake the feeling that the economic outlook is on the downswing, according to the latest Leeds Business Confidence index.

The quarterly survey of business leaders is conducted by economists at the University of Colorado’s Leeds School of Business.

Rising interest rates, inflation and a potential recession were cited as reasons for concern.

“We continue to have very muted expectations for the economy from our business survey responses,” Richard Wobbekind, senior economist and faculty director of CU’s business research division, said during a conference call with journalists.

Those who responded are feeling pessimistic about all the indicators included in the index, such as sales, profits, hiring and capital expenditures.

The economy in Colorado and across the U.S. has proven resilient in the face of higher interest rates and stubborn inflation for the past two years, defying widespread predictions of an inevitable financial downturn. But economists and business leaders remain wary.

There are signs that it makes sense to worry, like the wave of large layoffs at high-profile tech companies and other large employers, according to Wobbekind.

“There are some things that are making front page news that give you some reason to believe that there is some slowdown occurring in the labor market,” he said.

Colorado’s job growth has slowed this year, and the state is lagging behind the U.S. when it comes to adding jobs. CU economists expected a slowdown in the state’s job growth this year. But they just reduced the forecast further, from 2 percent to 1.8 percent, Wobbekind said.

“I guess you could say it's slowing a little bit more than anticipated,” he said. 

But even as job growth cools, economists and the business community are stumped about when, exactly, there will be a recession, though most seem to think it’s on the way. More than 40 percent of CU survey respondents expect a recession to start this year. That’s actually down from more than half who predicted a recession in 2023 in the last survey three months ago. But at the same time, a greater share of respondents now say there will be a recession in 2024.

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