Despite continued trade wars, a presidential impeachment and forecasts for slower economic growth, confidence among Colorado business leaders slightly increased heading into 2020, according to the University of Colorado Boulder’s Leeds Business Confidence Index released Thursday.
“What this shows us is that if you’re a company looking at hiring or investing, what’s going to cause you to pause isn’t the impeachment hearings,” said Brian Lewandowski, associate director of the Leeds Business Research Division. “What you’re concerned about is the economy and even though growth is not expected to be robust in 2020, it shows that we’re not necessarily heading towards recession in 2020.”
According to the Federal Reserve Bank of Philadelphia and Haver Analytics, the national gross domestic product is projected to slip from 2.2% in 2019 to 1.8% in 2020. However, economists at the Leeds School of Business predict Colorado, and Boulder County in particular, will continue to outpace the nation.
In 2018, according to the Bureau of Economic Analysis, Colorado’s real gross domestic product grew by 3.5%, versus the national real gross domestic product, which grew by 2.9%. In 2019, Colorado also had a lower unemployment rate (2.2%) as compared to the nation (3.3%), both of which were outdone by Boulder County (2%).
Of the 230 business leaders who responded to the business index survey, 1 in 5 respondents (20.5%) believe the state economy will grow faster in the first quarter of 2020, and 14% expect it to slow. The outlook of the majority of panelists (65.4%) remains neutral.
“We’ve got broad-based growth and then there are very strong subsector pieces,” Richard Wobbekind, executive director of the Leeds Business Research Division, said in December following the release of the Leeds School of Business Colorado Business Economic Outlook. “So there aren’t a lot of warning signs in Boulder County of some sort of impending economic doom.”
The only industry expected to lose jobs this year, according to the Leeds Colorado Business Economic Outlook, is the information sector, which the report estimated would lose 500 jobs statewide. Meanwhile, Boulder County’s other key industries — aerospace, biotech, cleantech, natural and organic products, outdoor recreation, tourism, and professional, scientific and technical services — all are expected to grow, with professional, scientific and technical services projected to be the strongest industry in 2020 with 3.4% growth.
While relatively strong labor reports — along with stable interest rates and an easing of trade tensions — led to all six categories surveyed for the confidence index to increase, the uncertainty regarding trade talks and the presidential election greatly tempered expectations, especially for the national economy, which remains 4 points below neutral despite increasing 4 points from the fourth quarter of 2019.
The other five categories — state economy, industry sales, industry profits, industry hiring, and capital expenditures — only rose slightly above neutral in the index. During the final quarter of 2019, industry sales was the only category that reported confidence levels above neutral.
“These results reflect the real business successes we’re seeing with the general uncertainty business owners feel going into the new year.” Wobbekind, said in a statement.