A survey that asked 143 Colorado business leaders how things are going found the group pessimistic about the new year, with more than half believing the U.S. will enter the a recession in the next six months, according to the Leeds Business Research Division at the University of Colorado.
That caused the Leeds Business Confidence Index – which asks about sales, profits, hiring and capital expenditure – to remain at the fourth lowest point in its 20-year history, at 39.8. A score of 50 is considered neutral. A year ago, the index was at 58.0.
That sentiment comes as the economy shows signs of recovery, with US gross domestic product up 3.2% in the third quarter after two quarters of smaller declines. At the same time, the annualized rate of Colorado GDP increased by 3.5%. The need to hire more workers continues as job creation also grows in the state, although not as fast as before.
So, asked Rich Wobekind, senior economist in the school’s Business Research Division that conducted the survey, why are they negative?
“The fact that four of the indicators are based on content (says) to me that they are processing more content information that their business is slowing down,” Wobekind said during a press conference on Wednesday. “And it’s not contradictory (but) it seems a little bit worse than some of the other confidence indexes that we’ve seen, especially given the fact that the state of Colorado is doing better compared to other parts of country.”
Some unknown factor may change everything, but negative sentiment may be based on who is being asked, he added. The financial sector was hit harder in the latter half of last year due to rising interest rates. That causes higher costs for new mortgages, home buyers who stop looking for finance jobs to cut.
But that feedback, along with a look at several other economic indicators, has Leeds economists predicting growth in Colorado this year, albeit at a slower rate than last year. Projections for Colorado:
- Employment is expected to increase by 4.4% in 2022 from the previous year, and will continue to increase by another 2% in 2023.
- Growth in personal income in the state, which was 7.9% annually in the third quarter of 2022, is expected to increase to 6.2% in 2023.
- Colorado’s GDP is expected to increase by 2% this year.
- Inflation is expected to rise to 4.5% this year, which is slower than last year.
“You’re probably wondering if our forecast is stronger than it needs to be,” Wobekind said. “We’re not like that.”
>> Read the forecast in Leeds
Take the poll:
45% of WW survey respondents got a raise
Last year in the third quarter, personal income rose in all 50 states. But none of the gains were as high as the 14.2% increase in Colorado, according to the US Bureau of Economic Analysis.
Whether that comes from workers changing jobs for better pay, successful union contract negotiations or employers raising wages to retain staff, it’s been a great year to work in Colorado.
This year will be the same. CU’s business school projects that personal income will grow 6.2% this year. And with last year’s high inflation rate, that affects the cost of living for those on minimum wage, government benefits or other regular wage increases.
In the latest unscientific What’s Working survey “Did you get a raise?” 45% of 134 respondents said yes, they received or gave a raise in 2023:
Many survey participants shared additional comments about their raise. “I am a railroad conductor. My salary increases were well announced later,” wrote Shawn Seeley, who lives in Fort Collins.
He confirmed that he was part of a group of railroad workers who negotiated a 24% pay increase in a five-year contract. He hasn’t had a raise since July 2019, so some of the negotiations include a retroactive salary of 14% that was paid earlier this week. Another 4% will come in July, he added.
“As you can imagine, going that long without a raise makes you feel like you’ve fallen into the kind of inflation we’ve had recently,” he said. “On the other hand, receiving a 14% raise all at once makes you feel like you’ve won the prize. In fact, however, our contracts, in general, keep us ahead of inflation, and this brings us back to level ground.
Marnie Lansdown, office manager for Freedom Service Dogs in Englewood, also received a whopping 13% pay raise. But for different reasons.
“I work in the nonprofit sector, and my organization just pushed back pay for almost all hourly employees in an attempt to help staff stay ahead of inflation,” Lansdown said. “The result is employees who feel good about the employer and are more likely to stay, as far as I’m concerned.”
But, of course, about 55% of the respondents indicated that they did not receive a salary increase in 2023. For others, it was because they got they increased last year (“16% bump in 2022 due to a salary study,” said one person). Another person said that they haven’t been in their jobs long so they don’t expect anything. Some understand that we are going through a slow economy, like 15% who chose the answer, “I get it. Times are tough even for my boss.”
Others simply answered “no,” or “I want to!”
But sometimes even a raise doesn’t help. One person who received the 3% cost-of-living adjustment as a state government worker added, “After three years of this, my income is not enough to maintain life in Denver so I feel now that I have to leave Colorado. .”
But the year has just begun. There is still hope. Lorie Thomas, who works as a part-time nurse in Pueblo, decided to ask for a raise after working for 14 months. His boss told him it was OK but didn’t say how much it would take. He is a PRN, or pro re netawhich means he works when needed.
“Apparently no one thought about it because they didn’t have a PRN nurse who stayed that long,” Thomas said. “Tomorrow we will see if the increase is finished and what it is!”
Some working bits
➔ upcoming job fair: The Colorado Department of Corrections still needs workers. The agency is hosting at least four job fairs this month, including a virtual one on Jan. 12. The other three will be held in Sterling (Jan. 11), Colorado Springs (Jan. 25) and Pueblo (Jan. 26 ). Hiring incentives of up to $12,000 are advertised with starting pay for a Correctional Officer 1 of “more than $50,000 / year.” >> Details, virtual registration
➔ Jobs still growing but slowing: Slow job growth is the economic mantra for 2022 and the last month of the year is no better. The US added 223,000 jobs in December, according to the Department of Labor. That’s slower growth than in recent months but it means the US is continuing to add jobs. The country’s unemployment rate fell to 3.5%, back to pre-pandemic lows. Colorado data will be released in two weeks. >> report, New York Times
➔ Round up available EV credits in Colorado: Various public programs are aimed at offsetting the cost of purchasing an electric vehicle. Colorado Sun reporter Michael Booth take you to what is available. >> read
➔ One week left to challenge extreme internet speed: There is $42.5 billion in federal funding available to help states invest in better broadband infrastructure — and provide more jobs — that will get more “unserved” households faster. Colorado officials are urging residents with subpar service to check their status on the national broadband map. >> read
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Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is holding you back or helping you at cosun.co/heyww. ~ Tamara
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