Despite job gains, Colorado’s business leaders are still downbeat on state’s economic future

Hart Van Denburg/CPR News
AURORA – Amazon packages are loaded on delivery trucks. Dec.6, 2022, at the company’s Himalaya Road facility in Aurora. Businesses across Colorado are getting ready for the holidays by adding staff to get through what is the busiest month of the year for many of them. Seasonal hiring plans offer a glimpse of where companies think the economy is headed. But this year’s holiday shopping bonanza is coming at a weird moment for the economy. Stubborn inflation is chipping away at paychecks, but consumer spending is still really strong. The Federal Reserve’s effort to tame inflation by raising interest rates has started to slow some sectors of the economy, especially the housing market.

Colorado’s business leaders aren’t feeling optimistic about the state’s economic future, even though the economy has been doing better this year than many were expecting at the start of 2023. That’s according to the Leeds Business Confidence Index.

Higher interest rates are top of mind for the state’s executives heading into the end of the year, according to respondents to a quarterly survey of business leaders conducted by economists at the University of Colorado’s Leeds School of Business. More than one-third cited interest rates as a concern for the months ahead.

Federal regulators often use higher interest rates to try to tamp down inflation.

Notably, concerns about inflation are receding, according to Brian Lewandowski, executive director of CU’s business research division. Roughly one-sixth of respondents cited inflation as the top driver of their economic outlook, down from prior quarters, Lewandowski said.

Still, Colorado’s business leaders are in a glum mood.

“[Business leaders] are still squarely pessimistic in the outlook,” Lewandowski said during a conference call with reporters.

The state’s business leaders have been stuck in a cycle of pessimism for a while, despite positive economic readings. The job market in Colorado and across the U.S., while slowing, has proven resilient.

But Colorado’s executives don’t seem convinced the good times will last. Or maybe, things aren’t as good as they appear on the surface. For instance, CU’s survey showed that business leaders think housing and worker shortages remain pressing challenges for Colorado’s economy, both of which have been ongoing problems for several years.

Survey respondents were downbeat across a range of components of their businesses, including profits, hiring and capital expenditures.

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