A measure of confidence among Colorado business leaders has turned pessimistic for the first time since 2011.
The Leeds Business Confidence Index for the fourth quarter fell 3.6 points to 46.9. Readings below 50 reflect more negative than positive responses.
“There’s too much uncertainty,” said Richard Wobbekind, executive director of the research division of the Leeds School of Business at the University of Colorado in Boulder. “It’s not necessarily the tariffs, it’s the uncertainty about how they are going to be resolved.”
The division calculates the index based on the responses to quarterly surveys of business leaders in a variety of industry sectors and from across the state. The latest responses in turn reflect concerns about trade, politics, the economy and uncertainty.
The Colorado economy continues to grow, Wobbekind said, but at a slowing pace. “If these things don’t get resolved — these uncertainties in trade issues — does the business sector really hunker down more so than they’ve done already?”
For the fourth quarter, readings fell for all six of the metrics the index tracks and dropped below 50 for five metrics.
Confidence in the Colorado economy fell to 47.4, 2.2 points below the third quarter and 7.9 points below the fourth quarter of 2018. While 15.2 percent of business leaders responding to the latest survey expected moderate or strong increases in the economy, 59.3 percent anticipated no change and 25.5 percent predicted moderate or strong decreases.
Confidence in the national economy dropped 4.6 points to 38.5, the lowest reading among the six metrics for the fourth quarter. While 11.8 percent of business leaders anticipated moderate of strong increases, 32.3 percent expected no change and 55.9 percent predicted moderate or strong decreases.
Business leaders were most optimistic about sales. The reading dropped 4.3 points, but at 51.3 reflected more positive than negative responses. Nearly a third — 32.3 percent — of leaders expected moderate or strong increases in sales. While 41.8 percent anticipated no change, 25.9 percent predicted moderate or strong decreases.
The reading for profits fell 2.7 points to 49.7 with 25.4 percent of leaders expecting moderate or strong increases, 47.9 percent anticipating no change and 26.6 percent predicting moderate or strong decreases.
The reading for hiring fell 2.7 points to 48.3 with 20.5 percent of leaders predicting moderate or strong increases, 53.6 percent expecting no change and 25.9 percent anticipating moderate or strong decreases.
The reading for capital expenditures dropped 5.2 points to 45.9 with 19 percent of leaders anticipating moderate or strong increases, 47.5 percent anticipating no change and 33.5 percent predicting moderate or strong decreases.