Colorado business optimism declines as election nears

1605 and 1615 California St. in the Central Business District. Aug. 19, 2023.
Kevin J. Beaty/Denverite
1605 and 1615 California St. in the Central Business District. Aug. 19, 2023.

Colorado business sentiment fell in the latest survey by CU Boulder economists, reflecting concern about interest rates and political uncertainty.

“Respondents said that the election cycle is in their psyche right now when it comes to their economic outlook,” said Brian Lewandowski, executive director of the Business Research Division at the Leeds School of Business at CU Boulder. He added that this is common in their survey. “We do see it more around presidential elections.”

Businesses overall feel neutral about the economic outlook in Colorado in the third quarter of 2024. Survey respondents scored 50.6 in their confidence, according to CU. That’s down from 53.7 last quarter, but much higher than the third quarter last year, 44.1.

“Even when you adjust for inflation, I think what we've seen is still growing consumption within our economy, so the demand is still there,” said Lewandowski. “Job postings numbers do remain high, and they still exceed the number of unemployed in the state and in the nation so that's an indication that there's this continued demand for workers.”

Colorado business leaders still feel substantially better about the state economy than they do about the national economy. That has long been a phenomenon of the survey results, which Lewandowski said partly reflects the reality that Colorado’s economy has generally performed better than the nation as a whole.

In Colorado, employment growth increased 1.9 percent year-over-year in May 2024, ranking it 15th in the nation. Personal income increased 4.8 percent in the first quarter of 2024, ranking the state 14th.

The business confidence survey polled 201 business leaders from June 1 to June 20.

Aside from political uncertainty, Colorado business leaders reported high interest rates as a concern. The federal fund's effective rate is higher than any point in the last 20 years, and it’s unclear when the Federal Reserve will start cutting rates again.

“There are some sectors losing jobs this year,” said Lewandowski. “And we expect we will end the year with some job losses, and again some of that pain is in those more interest rate sensitive industries.”

“We just don't need as many mortgage brokers right now for instance or as many bankers.”