A new business confidence survey shows that 2024 could be an OK year for Colorado

A new survey of the state’s business climate shows lingering uncertainty about the economy, but there may be better days ahead.

The Leeds Business Confidence Index is a project of the Leeds School of Business at the University of Colorado at Boulder. The quarterly survey is Front Range-centric — that’s where 80% of the state’s population is — but tries to cover the entire state.

While there’s some optimism heading into the first quarter of this year, Brian Lewandowski of the Leeds Business Research Division said there continues to be “general pessimism” from business leaders for the past seven quarters. That roughly matches attitudes measured in national surveys.

Lewandowski noted that while pessimism is lingering, actual conditions are, by and large, better than many people believe.

For instance, while there was a lot of speculation about the prospect of a recession in 2023, that didn’t come to pass. Job growth slowed, but it wasn’t slow, Lewandowski said. Interest rates increased, but the pace of inflation slowed. The Dow Jones Industrial Average set new record highs in 2023.

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Despite continued turbulence in the construction industry, “2023 did OK, counter to all the confidence indices.” Lewandowski said.

That’s led to business leaders gradually starting to move past the idea of a recession, he added.

Richard Wobbekind, the senior economist and faculty director of the Leeds School’s Business Division, noted that in mountain communities, the economy’s growth has slowed somewhat, as has job growth. But, he added, the forecast even for that part of the state’s economy points to no recession this year.

“It seems like the one sector really driving us down is the construction industry,” Wobbekind said. Reasons for that are hard to pin down, he added, noting that it could be due to the fact Colorado is a higher cost-of-living state.

Still, he noted, there seems to be some optimism heading into the second quarter of this year. Wobbekind noted there’s some optimism about the U.S. Federal Reserve Board cutting back a bit on the increases in the federal funds rate. The Federal Reserve has hiked that rate several times over the past couple of years to fight inflation. That rate isn’t directly tied to mortgage rates but those rates have crept down from the highs set over the past several months.

Wobbekind said recent data is “making me feel better” about the broad economy being in better shape than the past two years.

Still, capital expenditures, which are essential for long-term economic growth are “muted,” Wobbekind said. There’s concern about commercial real estate, banking and venture capital making business investments more difficult.

Wobbekind noted that he and Lewandowski on Friday were driving from Denver to Boulder when another passenger asked Lewandowski if he’d been skiing yet this season. He hadn’t.

Wobbekind added that replacing his current ski jacket costs roughly as much as a single-day lift ticket at some resorts.

People worrying about job security, housing and the price of everyday items can affect spending on discretionary items, he said.

Still, the big things that drive a resort economy — weather and national and international events — are largely out of everyone’s control.

So far, though, 2024 seems to be shaping up to be an OK year.