Although virtually no region has been spared by the COVID-19 pandemic’s impact on the economy, Colorado’s business leaders are hopeful “that a recovery is in sight,” according to the University of Colorado—Boulder’s Leeds Business Confidence Index.
The index surveyed 328 Colorado business leaders in December on their outlook on the economy both in their state and on the national level, along with perceptions of industry sales, industry profits, industry hiring and capital expenditures. In the first quarter of 2021, the majority of business leaders expected the economy to see no change overall since 2020’s fourth quarter, with the index remaining at 47.9, where a score of 50 is neutral. However, the leaders expected all six components to return to growth in the second quarter of 2021.
Though confidence was down in both the state and national economy compared to the previous year, in the first quarter of 2021, business leaders’ confidence in the Colorado state economy was 3.4 points higher than in the national economy. That trend continues into the second quarter of 2021, with the outlook on the state economy being 3.1 points higher than the national economy, according to the index. About 61% of Colorado business leaders believed the state economy will be neutral to positive in 2021’s first quarter, while about 54% expect neutral to positive on the national level.
As compared to the first quarter of 2020, before the coronavirus was declared a pandemic, the perception of Colorado’s economy has understandably seen a decrease from a score of 51.5 to 46.9 in the first quarter of 2021. However, since the COVID-19 pandemic began, with a low score of 28.8 in the second quarter of 2020, the state has seen a gradual increase in economic outlook over time: The index stood at 46.8 in the third quarter of 2020 and 48.9 in the fourth quarter.
“While the Colorado and national economy will likely continue to struggle for many months, there seems to be reason for optimism in the year ahead,” said Richard Wobbekind, senior economist at the Leeds School of Business, according to CU Boulder Today, the university’s news outlet.
Although business leaders’ faith in the national economy has dwindled since this time last year, the first quarter of 2021 scored higher in the index than 2019’s first quarter, at 43.5 and 42.5, respectively. About one-third of respondents credited the COVID-19 vaccine rollout and its implications on reopening the economy for their increased faith in the economy in 2021, especially in the second quarter.