Colorado business leaders say they are pessimistic about the economy for the first time since 2011, according to the Leeds Business Confidence Index (LBCI) released by CU Boulder鈥檚 Leeds Business Research Division.
The LBCI has been in positive or neutral territory since the end of the recession but concerns about trade and politics has created a shaky outlook looking ahead to the fourth quarter of 2019, says economist Richard Wobbekind.
CUT 1 鈥淭he number one thing, by far, is trade policy, according to the survey respondents. They also have overall concern about politics in the country. The current condition of the economy and then, just once again, they're responding to the uncertainty out there. There鈥檚 too much uncertainty. (:18) And of course you could say the same thing about trade. It鈥檚 not necessarily the tariffs specifically, it鈥檚 the uncertainty about how鈥檚 that all going to be resolved? When is it going to be resolved?鈥� (:26)
And Wobbekind believes this negative outlook would change if the trade issues were resolved. But, he says, it needs to happen sooner than later or we could see a drop-in consumer confidence, which could send the economy downward.
CUT 2 鈥淪o we are relying more and more on federal and state鈥檚 government spending and, particularly, on the consumer. If the consumer changes their course for whatever reason then that could really cause problems. (:14) 听So it鈥檚 very important that the trade uncertainty gets resolved and puts the economy鈥攖he private sector in particular鈥攂ack on solid footing.鈥� (:23)
But even with the low LBCI numbers, Wobbekind says there are some bright spots in our state economy.
CUT 3 鈥淔or the first time in nine years we actually had a slower growth in our inflation rate than the U.S did. That鈥檚 a good thing. We continue to have very stable and low unemployment rates in the state. In fact, we have the sixth lowest unemployment rate in the country, now. (:16) So all of those things, I think, you can look at as near-term positives. But the question is; If these things don鈥檛 get resolved that are out there - these uncertainties in trade issues - does the business sector really hunker down?鈥� (:30)
The Leeds Business Confidence Index measures Colorado business leaders鈥� optimism and expectations for six components: the state economy, the national economy, industry sales, industry profits, industry hiring and capital expenditures.