Colorado business leaders are less confident heading into the fourth quarter as concerns about the economy and uncertainty over the election mount. They’re more upbeat, however, about the year ahead, according to the latest results of an index tracking their expectations.

“While individuals noted optimism around falling interest rates and inflation, they also noted uncertainty and angst surrounding the election,” said Brian Lewandowski, executive director of the business research division of the Leeds School of Business at the University of Colorado at Boulder.

The division calculates the quarterly confidence index based on the results of surveys of business leaders across the state and industry sectors.

The Leeds Business Confidence Index retreated 3.9 points between the third and fourth quarters to 46.7. Readings below 50 reflect more negative than positive responses to the survey upon which the index was based.

Looking ahead to the first quarter of 2025, the overall reading rebounded to 51.3.

“The fourth quarter dip in the index reflects what we are seeing in similar national surveys. The combination of a slowing national economy and political uncertainty are driving these numbers,” said Richard Wobbekind, senior economist and faculty director of the division. “The bounce back in Q1 2025 numbers highlights the calm after the political storm and is reassuring that growth will continue in the coming year.”

Between the third and fourth quarters of 2024, all six individual components of the index fell below 50.

Out of 234 business leaders who responded to the survey, 194 offered open-ended explanations for their outlooks. Of those, 39.7 percent attributed their responses to the election, while 27.8 percent cited interest rates, 14.9 percent inflation. and 10.3 percent general economic slowing.

Expectations for the Colorado economy dropped 5.1 points to 49 between the third and fourth quarters. Among the business leaders who responded to the survey, 33.2 percent expected a moderate or strong increase in the economy. But 34 percent anticipated a moderate or strong decrease. The remaining 32.8 percent forecast no change.

Expectations for the national economy fell 1.1 points to 45.7. While 30.3 percent of leaders expected moderate or strong increases in the national economy, 41.5 percent anticipated moderate or strong decreases and 28.5 percent forecast no change.

Gross domestic product, the broad measure of goods and services produced in the state, increased at a seasonally adjusted annual rate of 2.7 percent in the second quarter of 2024. The biggest gains occurred in the agricultural and retail trade sectors.

On a national level, GDP increased at an annual rate of 3 percent in the second quarter.

The Consumer Price Index, one  measure of inflation, increased a total of six-tenths of a percent in June and July in the Denver, Aurora and Lakewood metropolitan area. The index rose 1.9 percent over the year. Nationally, the Consumer Price Index advanced 2.5 percent over the past year.

Expectations for hiring fell 3.4 points to 44.6, the lowest reading among the six individual components. Most leaders — 45.2 percent — expected no change in staffing. But 35.7 percent anticipated moderate or strong decreases. Another 19.1 percent forecast moderate or strong increases.

For August, the latest month for which estimates are available, the statewide seasonally adjusted unemployment rate edged up a tenth of a point to 4 percent, the first time the state rate reached that level since January 2022. Between August 2023 and August 2024, nonfarm payrolls increased 41,900 with the biggest gains in the educational and health services, professional and business services and leisure and hospitality sectors.

The labor participation rate, the proportion of the population working or looking for work — remained unchanged for a third consecutive month at 67.9 percent. That’s the fourth-highest rate among the 50 states.

The seasonally unadjusted jobless rate fell two-tenths of a point to 4.4 percent in Mesa County and slipped a tenth of a point to 4.7 percent in Grand Junction.

Expectations for sales fell 6.7 points to 48. While 33.2 percent of business leaders anticipated moderate or strong increases in sales, 37.8 percent forecast moderate or strong decreases and 29 percent expected no change.

According to the Colorado Department of Revenue, retail trade rose nine-tenths of a percent in June compared to a year ago.

Personal income and per capita personal income both increased in Colorado between the fourth quarter of 2022 and fourth quarter of 2023. Consumer spending accounts for more than two-thirds of economic activity.

Expectations for profits fell 5.7 points to 46.3 with 27.3 percent of business leaders expecting moderate or strong increases, 36.6 percent anticipating moderate or strong decreases and 36.1 percent no change.

Expectations for capital expenditures declined 4.3 points to 46.6 with 24.5 percent of leaders forecasting moderate or strong increases in expenditures, 32.4 percent moderate or strong decreases and 43.2 percent no change.

The year-to-date value of construction in Colorado, one measure of capital expenditures, decreased 13.2 percent through August 2024 compared to the same span in 2023.