Amid stubborn inflation, Colorado business leaders are frustrated with their future prospects, according to the University of Colorado’s latest Leeds Business Confidence Index.
Rising interest rates and ongoing supply chain issues are also weighing on sentiment, according to the latest quarterly report from the University of Colorado’s Leeds School of Business. The survey collected 163 responses from September 1 to September 21.
Respondents expect softness in sales, profits, hiring and capital spending in the final quarter of 2022, said Richard Wobbekind, senior economist and faculty director of CU’s business research division.
“These business leaders … made it clear that they see economic weakness ahead,” Wobekind said on a conference call with reporters.
The dissatisfaction among the state’s business leaders reflects the general public sentiment, as the highest inflation rate in more than 40 years has outpaced wage growth and eroded consumers’ purchasing power. The Federal Reserve is rapidly raising interest rates to drive down prices, making it expensive for businesses and consumers to borrow money and further clouding the outlook.
Mortgage rates are more than double what they were a year ago and just hit their highest level in 15 years, dampening home sales.
“Clearly, the slowdown in the housing market is causing another set of concerns,” Wobbekind said.
Despite the sluggish economy, job growth remains strong in Colorado and nationwide — for now. Interestingly, companies are starting to delay filling open positions, Wobbekind said, although this is not yet shown in the data.
More than three-quarters of businesses surveyed by CU said inflation had a moderate or extreme impact on their business operations. About half said they would have to raise wages, cut expenses and pass higher costs on to consumers by raising prices.
Still, in a somewhat optimistic sign, inflation is most expected to start slowing next year.
“They see the light at the end of the inflation tunnel,” Wobekind said.