Business confidence took one of the most neutral looks in the history of the LBCI as panelists weigh new looming policy. All components of the Leeds Business Confidence Index (LBCI) posted year-over-year and over-the-quarter gains ahead of Q1 2025. The new presidential administration, tariffs, and interest rates were commonly cited as the primary reason for panelists’ responses.

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Business confidence took a step back ahead of Q4 as panelists process uncertainty, notably around the election. Confidence rebounded to positive territory looking an additional quarter out to Q1 2025. All components of the Leeds Business Confidence Index (LBCI) posted year-over-year gains ahead of Q4 2024, but all components slipped quarter-over-quarter. The upcoming election, interest rates, and inflation were commonly cited as the primary reason for panelists’ responses.

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Entering 2024, business confidence remains suppressed but is on the rise. Nearly every component of the Leeds Business Confidence Index (LBCI) increased ahead of Q1 and Q2 2024. There was less consensus about the reasons for their outlook compared to the last several quarters, with interest rates, general comments about the economy, and inflation cited as the most pressing factors.

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The economy has proven more resilient in 2023, with a majority of respondents to the Leeds Business Confidence Index (LBCI) indicating the economy has performed better-than-expected. Despite this reflection, Colorado business leaders’ pessimism extended for another quarter ahead of Q4 2023, often citing interest rates, inflation, politics, and recession for their outlook. The LBCI captures Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditures. The index remained below 50 in the current survey (50=neutral) and was below the long-term average. The index fell from 44.1 in Q3 2023 to 43.6 ahead of Q4 but increased slightly looking out further to Q1 (45.7). Three of the six components of the index increased ahead of the fourth quarter.

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Despite the economy demonstrating resiliency in the first half of the year, Colorado Business leaders’ pessimism extended for another quarter ahead of Q3 2023, often citing interest rates, inflation, and general concerns about a recession. The Leeds Business Confidence Index (LBCI) captures Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditures. The index remained below 50 in the current survey (50=neutral) and was below the long-term average (53.6). The index fell from 45.1 in Q2 2023 to 44.1 ahead of Q3 but increased slightly looking out further to Q4 (44.6). Four of the six components of the index decreased ahead of the third quarter.

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It’s the third-longest period of negativity in the history of the Leeds Business Confidence Index.​ ​​

If you’re looking for good news in the latest quarterly Leeds Business Confidence Index, it’s that while business leaders remain pessimistic about Colorado’s economic trends, they sound less dispirited than surveys past.

However, with a five of the last six indices returning negative sentiment from industry, we’re currently in the third-longest period of pessimism in the index’s 20-year history.

Perhaps one development tamping down any growing optimism is the drumbeat of bad news related to banking and Fed actions to curb inflation. Several leaders mentioned banking issues in explaining their responses.  

“There is plenty of pessimism in the index, but we do see a few hopeful signs, including optimism about sales and expectations of lower inflation,” said Brian Lewandowski, executive director of the Business Research Division at Leeds, which publishes the report.

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The LBCI captures Colorado business leaders’ three- and six-month outlooks on the national and state economies, industry sales, profits, hiring plans, and capital expenditures. For the second quarter, 230 participants recorded their responses to a wide-ranging survey on these economic topics. 

Among the highlights: 

• Not surprisingly, interest rates (38 percent) and inflation (31 percent) were the two most-noted reasons for panelists’ pessimism as we head into the next quarter.
• Inflation in the Denver-Aurora-Lakewood metro area ran ahead of the national pace from 2013 to 2020, but panelists are forecasting improvement—a majority said prices will be lower than current levels by the end of December. Updated BRD forecasting expects inflation to increase 4.3 percent from the year, a slight improvement over the previous projection of 4.5 percent. 
• Slightly more than half of participants (56.9 percent) expect the United States to enter a recession in 2023.
• Among the six components measured by the index, only industry sales (50.4) was in optimistic territory. Each component increased from the first quarter, but the other five remain below 50. In a troubling sign, the lowest data point was the national economy (37.1).

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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, Colorado'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 Colorado’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. 

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“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 Colorado to increase 4.5 percent this year. 

The LBCI captures Colorado 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 Colorado’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.

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Two decades ago, the Leeds Business Confidence Index first reported results ahead of Q2 2003 as Colorado was entrenched in a long recovery from the tech-led recession. Twenty years later, as the index enters 2023, despite a notably better current economy, Colorado business leaders are less optimistic than they were in the early days of the index as a host of factors create notable headwinds: high interest rates and inflation, labor shortages, and fears about slowing consumer spending.

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Colorado business leaders expressed pessimism ahead of Q4 2022, recording the fourth-lowest index in the 20-year history of the Leeds Business Confidence Index driven by inflation, interest rates, the supply chain, and the workforce, among other factors. Looking two quarters ahead to Q1 2023, overall expectations rebounded slightly, but still recorded the fifth-lowest outlook in the history of the index as economic headwinds weigh on optimism. Four of the six components of the index decreased ahead of the fourth quarter.

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Colorado business leaders expressed pessimism ahead of Q3 2022, recording the fifth-lowest index in the 20-year history of the Leeds Business Confidence Index driven by inflation, interest rates, and the supply chain, among other factors. Looking two quarters ahead to Q4 2022, overall expectations slipped further, recording the fourth-lowest outlook in the history of the index as the weight of economic headwinds overtake optimism.

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