Colorado business leaders have reported a sharp drop in confidence as a waiting time on the management of a second Trump administration moved to fears of political disorders, new prices and a softer economy, according to a Quarterly survey of the University of Colorado Boulder Leeds School of Business.
The Leeds business confidence index measures the expectations of industry sales, profits, hiring and investment, as well as the prospects of business leaders for the economies of Colorado and the United States during the two to come. A score greater than 50 suggests plans to develop or a positive perspective, while one of 50 suggests a more cautious approach or negative perspectives.
Expectations in the fourth quarter for the first quarter had increased, from 46.7 to 50, as neutral as the index could become and reflect a balanced approach. But once business leaders had a better idea of the new program, he dived at 31.9 for the second quarter and 32.2 for the third quarter.
“There is a lot of uncertainty Prices and the Restructuring of the federal government“Said Brian Lewandowski, executive director of the commercial research division at the Leeds School of Business, during a news call on Tuesday morning to discuss the index.
The drop in business confidence was the second largest measured in 23 years of surveys, only exceeded by the unexpected escape of COVID-19 and the locking of 2020. The index is now slightly higher than the levels reached in the last two recession.
Unlike these shocks, resulting from a housing crisis and a global pandemic, the current slowdown is linked to political uncertainty within an otherwise strong economy.
“Uncertainty is shock. One of the risks is how companies could respond to it,” said Richard Wobbekind, a associate dean and main economist at the Leeds School of Business. If consumers and businesses reduce expenses, concerns could become self-readers. But the situation remains fluid and if certainty is restored, the feeling could bounce back.
Why such a dramatic swing? In total, 218 panelists responded to the quarterly investigation between March 3 and 20, when pricing threats made the headlines, federal employment was being reduced and the long -standing world alliances were shaken. From this group, 190 provided open responses to what concerned them the most.
The greatest concern, mentioned by 35.8% of respondents, was the new administration. The prices were mentioned by approximately a quarter of those who responded and economic uncertainty of around 15%.
The Conference Board consumer confidence index is also down, down in the last four months and reaching the lowest levels in 12 years.
Consumers express concerns that prices launch another inflation cycle, which they expect to reach 6.2%. They resumed their expectations in stock market gains and more consumers plan to reduce spending to prepare for a slowdown.
Among the business leaders interviewed, the greatest drop came from expectations for the American economy, which increased from 50.3 to 25.9, followed by the prospect of the colorado economy, which increased from 50.1 to 28.1 in the second quarter. In three months, the position went from neutral to recession.
The companies hoped a little more than the sales and the benefits of the industry hold, but even these measures were in territory in contraction at 37.3 and 35.2.
“They (consumers) told us about their uncertainty, their concerns. Sometimes, behavior corresponds to these expectations, and sometimes that does not correspond,” said Lewandowski.
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