Colorado business leaders said they are pessimistic about the economy for the first time since 2011, according to the Leeds Business Confidence Index.
The fourth-quarter index, released Oct. 1 by the Business Research Division at the University of Colorado-Boulder Leeds School of Business, has been in positive or neutral territory since the end of the recession.
The quarterly index gauges Colorado business leaders’ opinions about economic trends and how their industries will perform in the coming quarter.
Panelists surveyed for the index cited concerns about trade, politics, the economy and general uncertainty looking ahead to the fourth quarter of 2019.
Responses followed a common theme, according to Richard Wobbekind, executive director of the Leeds Business Research Division.
“There’s too much uncertainty,” Wobbekind said. “It’s not necessarily the tariffs, it’s the uncertainty about how they are going to be resolved.”
The Leeds Business Confidence Index measures business leaders’ optimism and expectations about six components: the state economy; the national economy; industry sales; industry profits; industry hiring; and capital expenditures.
The Q4 survey was conducted Aug. 30 to Sept. 20, prior to the announcement of congressional impeachment proceedings.
The overall LBCI dropped 7.7 points from the 2018 fourth quarter outlook, to 46.9. An LBCI score of 50 marks a neutral outlook.
Five of the six LBCI components read negative for the fourth quarter of 2019, with industry sales being the only measure still in positive territory.
All six components fell into negative territory when panelists were asked about the first quarter of 2020.
Panelists were most pessimistic about the national economy, with an LBCI score of 38.5, an 11.6-point drop from the fourth quarter of last year.
About 56 percent of panelists said they expect the national economy to slow in the fourth quarter, while nearly 12 percent still expect acceleration.
Small employers surveyed were less optimistic than large employers.
Although panelists surveyed are less than rosy about Colorado’s economy, with an LBCI score of 47.4, the state’s real GDP growth is still at 4.4 percent year-over-year and 3.6 percent quarter-over-quarter.
Essentially, the state’s economy is still growing, but growing more slowly.
Colorado’s unemployment rate is also very low, leaving a big question, Wobbekind said.
“If these things don’t get resolved—these uncertainties in trade issues — does the business sector really hunker down more so than they’ve done already?” Wobbekind said.