Colorado business leaders are less upbeat heading into the final months of the year as concerns mount over the COVID-19 pandemic, inflation and supply chain issues.

The Leeds Business Confidence Index retreated 11.2 points to 56.1 for the fourth quarter. The index was lower at 47.9 for the fourth quarter of 2020.

The index is based on quarterly surveys of business leaders across the state and industry sectors.

“Concerns around COVID-19, particularly the Delta variant, have played the biggest impact in this tempered confidence,” said Rich Wobbekind, senior economist and faculty director of the business research division at the Leeds School of Business at the University of Colorado at Boulder. 

“Inflation and a constrained supply chain, as well as politics, have also played a role,” Wobbekind added.

In addition to an overall score, the index provides individual scores for each of six metrics. Readings above 50 indicate more positive than negative responses to the survey upon which the index is based.

For the fourth quarter of 2021, all six metrics declined. But five metrics remained above 50.

Confidence in the Colorado economy decreased 15.8 points to 55.1. A total of 36.8 percent of business leaders responding to the latest survey predicted a moderate or strong increase in the state economy, while 45.1 percent forecasted no change and a total of 18.2 percent expected moderate or strong decreases.

Confidence in the national economy dropped 18.6 points. At 48.9, the reading was the lowest of the six metrics for the fourth quarter and reflected more negative than positive responses. While 30.3 percent of leaders anticipated moderate or strong increases in the national economy and 35.2 percent expected no change. Another 34.5 percent forecasted moderate or strong decreases.

Hiring expectations retreated 6.1 points, but at 61.1 was the highest of the metrics for the fourth quarter. Exactly 50 percent of leaders expected moderate or strong increases in hiring, 35.6 percent anticipated no change and 14.4 percent forecasted moderate or strong decreases.

Sales expectations fell 10.6 points, but at 59 was the second-highest reading. While 53.4 percent of leaders predicted moderate or strong increases 26.1 percent expected no change and 20.4 percent anticipated moderate or strong decreases.

Profits expectations decreased 8.6 points to 56.6. While 46.2 percent of leaders forecasted moderate or strong increases, 32.2 percent expected no change and 21.6 percent anticipated moderate or strong decreases.

Capital expenditure expectations declined 7.2 points to 55.4 with 39.4 percent of leaders forecasting moderate or strong increases, 42 percent no change and 18.6 percent moderate or strong decreases.

While the statewide seasonally adjusted unemployment rate fell two-tenths of a point in August, the latest month for which estimates are available. But at 5.9 percent, the state rate remains above the national rate of 5.2 percent. Still, Colorado ranks 16th nationally in terms of labor market recovery following the pandemic.

The seasonally unadjusted rate fell eight-tenths of a point to 5.7 percent in Mesa County.

The value of construction in Colorado through the first eight months of 2021 increased 22.1 percent compared to the same span in 2020 with residential construction driving growth at an increase of 34.2 percent.

Looking ahead further to the first quarter of 2022, the Leeds Business Confidence Index rose 1.1 points to 57.2.