A poll asking 143 Colorado business leaders how things are going showed the group is still pessimistic about the new year, with more than half believing the U.S. will enter a recession in the next six months, according to the University of Colorado Leeds Department of Business Research.
This caused Leeds’ business confidence index – which asks about sales, profits, employment 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 58.0.
The sentiment comes as the economy again showed signs of growth, with US gross domestic product rising 3.2% in the third quarter after two quarters of slight decline. At the same time, Colorado’s annual GDP rate increased by 3.5%. The need to hire more workers continued as job creation also grew in the state, although not as quickly as before.
So, asked Rich Wobbekind, a senior economist in the school’s Department of Business Research who conducted the survey, why were they so negative?
“The fact that the four indicators are internally based (tells me) that they’re processing more information internally that their business is slowing down,” Wobbekind said during a news conference Wednesday. “And it’s not inconsistent (but) it seems a little worse than some of the other confidence indices that we see, especially in light of the fact that the state of Colorado performs better compared to other parts of the country.”
Some as-yet-unknown factor could change everything, but the negative sentiment could just be based on who was asked, he added. The financial sector was hit harder in the second half of last year when interest rates rose sharply. This has led to higher costs for new mortgages, homebuyers to pause their search and finance jobs to be cut.
But that feedback, along with a look at several other economic indicators, led the Leeds economist to predict growth in Colorado this year, albeit at a slower rate than last year. Projections for Colorado:
- Employment is projected to grow by 4.4% in 2022 from the previous year and continue to grow by another 2% in 2023.
- Personal income growth in the state, which has grown by 7.9% annually since the third quarter of 2022, is expected to increase by 6.2% in 2023.
- Colorado’s GDP is projected to grow by 2% this year.
- This year, inflation is expected to grow by 4.5 percent, which is slower than last year.
“You might be wondering if our forecast is stronger than it should be,” Wobbekind said. “We don’t think so.”
>> Read the Leeds forecast
Take part in the survey:
45% of WW survey respondents get a raise
Last year, in the third quarter, personal income rose in all 50 states. But none of the gains were as high as Colorado’s 14.2% increase, according to the U.S. Bureau of Economic Analysis.
Whether it was the result of workers changing jobs for better pay, successful union negotiations or employers raising wages to retain staff, it was a good year for hiring in Colorado.
This year could be the same. The CU School of Business projects that personal income will grow by 6.2% this year. And with last year’s high inflation rates, this has had the effect of increasing the cost of living for those on minimum wage, government benefits or other regular wage increases.
In the latest non-scientific survey by What’s Working magazine, “Are you getting a raise?” 45% of 134 respondents said yes, they were getting or giving a raise in 2023:
Many survey participants shared additional comments about their raise. “I am a railway conductor. My pay raises have been well received lately,” wrote Shawn Seeley, who lives in Fort Collins.
He confirmed that he was part of a group of railroad workers who negotiated a 24 percent pay increase over a five-year contract. He hasn’t received a raise since July 2019, so some of the negotiations included retroactive 14% pay that was paid earlier this week. Another 4 percent will come in July, he added.
“As you can imagine, going that long without a raise makes you feel like you’re falling behind the inflation we’ve experienced recently,” he said. “In turn, getting a 14% raise suddenly makes you feel like you’ve won a big prize. Truth be told, our contracts, overall, have kept us ahead of inflation, and this one is putting us back on track.”
Marnie Lansdown, office administrator for Freedom Service Dogs in Englewood, also received a significant 13% raise. But for different reasons.
“I work in the nonprofit sector and my organization just raised wages for almost all hourly employees in an attempt to help the staff beat inflation,” Lansdown said. “The result is staff who feel good about their employer and are much more likely to stay, as far as I can tell.”
But of course, about 55% of respondents said they didn’t get a raise or don’t plan to get one in 2023. For some, it was because they got a raise last year (“16% jump in 2022 due to salary study,” said one person). Another person said that they hadn’t been at work for a long time so they didn’t even expect it. Others understood that we are going through an economic slowdown, such as the 15% who chose the answer: “I understand. Times are tough even for my employer.”
Others just answered “no” or “I want!”
But sometimes even a raise didn’t help. One person who received a 3% cost of living adjustment as a state civil servant added, “After three years of this, my income is no longer enough to support me in Denver so now I feel I have to move out of 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 14 months on the job. The employer told her OK, but did not say how much it would be. She is a PRN, or pro re netawhich means it works when needed.
“Obviously no one even thought about it because they didn’t have a PRN nurse that stayed that long,” Thomas said. “Tomorrow we will see if the raise has arrived and how much it is!”
Other working parts
➔ 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 (January 11), Colorado Springs (January 25) and Pueblo (January 26). Hiring incentives of up to $12,000 are advertised with a starting salary for Correctional Officer 1 of “over $50,000 per year.” >> details, virtual registration
➔ Jobs continue to grow, but are slowing down: Slower job growth has been the economic mantra for 2022, and the last month of the year was no exception. According to the Ministry of Labor, the USA created 223,000 jobs in December. That’s slower growth than in recent months, but it means the U.S. continues to create new jobs. The country’s unemployment rate fell to 3.5%, back to the lowest levels before the pandemic. The data from Colorado will be released in two weeks. >> report, NY Times
➔ Range of available EV loans in Colorado: Various public programs are aimed at reimbursing the costs of purchasing an electric vehicle. Reporter of the Colorado Sun Michael Booth guides you through what is available. >> Read
➔ One more week to challenge terrible internet speeds: $42.5 billion in federal funding is available to help states invest in better broadband infrastructure — and provide more jobs — to bring more “unserved” households online faster. Colorado officials are encouraging residents with poorer service to check their status on the national broadband map. >> Read
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Thanks for sticking with me on this week’s report. As always, share your 2 cents on how the economy is holding you back or helping you rise at cosun.co/heyww. ~ Tamara
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