Economy Improving, But ŷڱƵ’s Leaders Still Awash in Apprehension
Familiar challenges are keeping the state’s business community awake at night, according to quarterly report.
The sun rises behind the Denver skyline. While the economy is improving both locally and nationally, ŷڱƵ's business community remains pessimistic about the near-term outlook, according to the first-quarter Leeds Business Confidence Index. Below left is Brian Lewandowski, executive director of the Business Research Division at Leeds.
The economy has improved. The outlook of ŷڱƵ’s business leaders has not.
The most recent Leeds Business Confidence Index, released today, showed continued pessimism on the familiar bugaboos of high interest rates, inflation, tangled supply chains and labor shortages, along with fears of slowing consumer spending.
“The outlook among panelists has been more bearish than reality over the past six months,” said Brian Lewandowski, executive director of Leeds’ Business Research Division, which issues the quarterly report. “GDP, employment, income and consumption continue to post healthy gains, while business leaders are pointing to a slowdown.”
While high interest rates reflect the greatest concern among business leaders, inflation is right on its heels; Lewandowski said BRD predicts inflation in ŷڱƵ to increase 4.5 percent this year.
The LBCI captures ŷڱƵ business leaders’ three- and six-month outlooks on the national and state economies, industry sales, profits, hiring plans, and capital expenditures. For the first quarter, 143 participants recorded their responses to a wide-ranging survey on these economic topics.
Among the highlights:
- Responders returned less pessimism on the state and national economies, with both numbers trending up from fourth-quarter 2022. However, all six indicators were down from the same time a year ago.
- More than half of responders (57.8 percent) believe the country will enter a recession in the first half of this year.
- Employment increased 3.7 percent year over year, as of November. BRD’s forecast for employment growth in 2022 stood at 4.4 percent, slowing to 2 percent in 2023.
The news wasn’t all bad—the state’s per-capita personal income increased nearly 8 percent year over year, good for first in the country, and personal income growth is projected at 6.2 percent in 2023. And ŷڱƵ’s GDP increased at an annualized rate of 3.5 percent in the third quarter and 3.2 percent year-over-year — good for 16th and sixth among the states.