Business confidence collapsing in Colorado as recession fears mount

Economic expectations for the third quarter reach fifth-lowest reading in two decades

Aldo Svaldi
The Denver Post
Visitors and residents walk along Main Street in Breckenridge on Friday, July 2, 2021. State leaders are concerned about the impact of a looming recession.
Tripp Fay/For the Summit Daily News

Confidence among Colorado business leaders has plunged, with one in five now saying the U.S. economy has already entered a recession and nearly three in five expecting the downturn to arrive sometime next year, according to the latest Leeds Business Confidence Index from the University of Colorado Boulder.

Economic expectations for the third quarter reached the fifth-lowest reading ever measured in two decades of business leader surveys and the outlook for the fourth quarter was even dourer, registering the fourth-lowest reading on record. Why does that matter? A darker business outlook will influence hiring and spending plans and it coincides with a sharp plunge in consumer confidence.

If both businesses and consumers are pulling back spending, a contraction may not be that far away. Colorado Cast, a short-term forecast of the state economy from Colorado State University, has the annual rate of economic growth falling to 1.8% in October, compared to 10% at the end of 2021.

“It is clear people who are on the ground, not just in Colorado but elsewhere, are really seeing a slow down coming in the economy,” said Rich Wobbekind, senior economist and faculty director of the Leeds Business Research Division at CU Boulder, during a media call Wednesday morning.

Inflation was by far the biggest worry among those responding, with more than seven in 10 saying it has had anywhere from a moderate to a significant to extreme impact on business. More than half expect to increase wages and a large share plan to pass on price increases to their customers, which will perpetuate inflation.


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