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Chris Dillmann/Vail Daily Archive
A new survey of the state’s business climate shows economic uncertainty remains, but better days could be ahead.
The Leeds Business Confidence Index is a project of Leeds Business School. At the University of Colorado Boulder. The quarterly survey focuses on the frontier areas, where 80% of the state’s population resides, but attempts to cover the entire state.
While there is some optimism heading into the first quarter of this year, Brian Lewandowski of Leeds Business Research said that over the past seven quarters, there has been “general pessimism” from business leaders. ” continues. This is broadly consistent with attitudes measured in national surveys.
Lewandowski said that although pessimism persists, the reality is generally better than many believe.
For example, there was much speculation about the prospect of a recession in 2023, but that did not materialize. Lewandowski said job growth had slowed, but not slowly. Interest rates have risen, but the pace of inflation has slowed. The Dow Jones Industrial Average hit a new all-time high in 2023.
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Despite the continued turmoil in the construction industry, “contrary to all confidence indicators, 2023 performed well,” Lewandowski said.
As such, business leaders are gradually starting to get over the idea of a recession, he added.
Richard Wobekind, senior economist and head of the school’s business department at Leeds, said economic growth, as well as job growth, had slowed slightly in mountain communities. But he added that projections for that part of the state’s economy also do not suggest a recession this year.
“It seems like the construction industry is really holding us back,” Wobekind said. It’s difficult to pinpoint the reason, he added, but it could be because Colorado is a high-cost state.
Still, he noted that there appears to be some optimism heading into the second quarter of this year. Wobekind said there is optimism that the U.S. Federal Reserve will slightly scale back the increase in the federal funds rate. The Fed has raised interest rates several times over the past few years to combat inflation. Although this rate is not directly related to mortgage rates, interest rates have gradually declined from the highs set in the past few months.
Wobekind said recent data makes him “feel better” that the overall economy is in better shape than it has been in the past two years.
Still, capital investment, which is essential for long-term economic growth, is “restrained,” Wobekind said. There are concerns that commercial real estate, banks and venture capital are making business investment more difficult.
Wobekind said that while he and Levandowski were driving from Denver to Boulder on Friday, another passenger asked Levandowski if he was still skiing this season. he didn’t.
Wobekind added that replacing your current ski jacket costs about the same as a one-day lift ticket at some resorts.
People worried about job security, housing and the price of everyday goods could impact spending on discretionary items, he said.
Still, the major drivers of the resort economy – weather and national and international events – are largely outside of anyone’s control.
But for now, 2024 seems to be shaping up to be an okay year.
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