Business confidence in Colorado — which has already been negative over the last year — slipped ahead of the second quarter of the year, a new report found.
The Leeds Business Confidence Index, a measurement of how business leaders across Colorado feel about the future of the national and state economy, fell by one point to a score of less than 42, the report released by the University of Colorado Boulder on Wednesday showed.
The survey of 213 business leaders in the state was collected between March 2 and March 20, a period that includes the U.S. and Israeli war against Iran when gas prices spiked across the state.
The war with Iran began on Feb. 28.
Business leaders said in the survey that issues such as geopolitical conflicts (48%), domestic policies (38%), and energy price volatility (20%) were among the biggest reasons behind their answers of what they thought about the state of the economy, the report said.
The index is still notably more positive than it was at the same time last year, when the score dived from a neutral baseline of 50 to nearly 32 (as uncertainty over tariffs and federal contract cuts triggered the third-lowest score after the 2008 recession and the COVID-19 pandemic).
But the new data also marks the third-longest period in the last 23 years where the index measures a pessimistic state of Colorado’s economy, CU Boulder economist Brian Lewandowski said. Since last year, following the tariffs and federal cuts, business uncertainty during President Donald Trump’s administration has started to become a new status quo.
“Business leaders are signaling that they are getting more used to operating in an environment where there is uncertainty,” Lewandowski said.
Ahead of the second quarter, the index saw improvements in the industry sales, profits, hirings and capital expenditures categories — both annually and quarterly.
The biggest declines in confidence were in the state and national economy categories. The index for the state economy fell from nearly 40 to almost 35. The national economy fell from a score of 41 to 35.
“The two that suffered and brought the index down were national and state expectations, so I think that’s where you’re seeing the impact of the Iran intervention reflected,” said Richard Wobbekind, CU Boulder economist.
“It’s more contained, I guess, overall, because I think their business is probably better than it was a year ago, in terms of where they’re sitting right now,” Wobbekind said. “But this is one more unknown or uncertainty.”
The survey shows business leaders in Colorado are considering adapting to the economy by having more rigorous limits on spending, accelerating the implementation of artificial intelligence and diversifying their sources of revenue.
It’s also going to be difficult to compare the recent rise in fuel prices to past oil crises, Wobbekind said. The Colorado economy is “fraught with so many different risks” from energy prices, tariffs, federal government restructuring to new policies reducing immigration amidst a slowing job market, he added.
The state is also dealing with long-term trends like its aging and declining population, he added.
“This really does present something quite different for the U.S. and state economies in terms of how we think about growth going forward, both in output and employment, and all of those kinds of things,” Wobbekind said.