A survey that asked 143 Colorado business leaders how things were going found the group still pessimistic about the new year, with more than half believing that the U.S. will enter a recession within the next six months, according to the Leeds Business Research Division at University of Colorado.
That caused the Leeds Business Confidence Index — which asks about sales, profits, hiring and capital expenditures — to remain at its 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 showed signs of growth again, with U.S. gross domestic product up 3.2% in the third quarter after two quarters of small declines. At the same time, the Colorado GDP’s annualized rate rose 3.5%. The need to hire more workers continued as job creation also grew in the state, though not as fast as before.
So, asked Rich Wobbekind, senior economist at the school’s Business Research Division that did the survey, why were they so negative?
“The fact that four of the indicators are internally based (says) to me that they’re processing more information internally that their business is slowing,” Wobbekind said during a news conference Wednesday. “And it’s not inconsistent (but) it seems a little bit more bearish than some of the other confidence indexes that we see, especially in light of the fact that the state of Colorado is outperforming compared to other parts of the country.”
Some not-yet-known factor could change everything, but the negative sentiment could just be based on who was asked, he added. The finance sector was hit harder in the latter half of last year as interest rates shot up. That led to higher costs for new mortgages, homebuyers to pause searches and finance jobs to get cut.
But that feedback, along with looking at several other economic indicators, had Leeds economists predicting growth in Colorado this year, albeit at a slower rate than last year. The projections for Colorado:
- Employment is projected to be up 4.4% in 2022 from the prior year, and continue to increase another 2% in 2023.
- The state’s personal income growth, up 7.9% annually as of third quarter 2022, is expected to increase 6.2% in 2023.
- Colorado’s GDP is projected to increase 2% this year.
- Inflation is expected to increase 4.5% this year, which is slower than last year.
“You may be wondering if our forecast is more robust than it should be,” Wobbekind said. “We don’t think so.”
Take the poll:
45% of WW survey respondents are getting a raise
Last year in the third quarter, personal income went up 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 that came from workers changing jobs for better pay, successful union contract negotiations or employers raising wages to retain staff, it was a good year to be employed in Colorado.
This year could be the same. CU’s business school projects that personal income will grow 6.2% this year. And with last year’s high inflation rates, that impacted the cost of living increase for those on minimum wage, government benefits or other regular wage increases.
In What’s Working’s latest unscientific survey “Are you getting a raise?” 45% of 134 respondents said yes, they were getting or giving a raise in 2023:
A lot of survey participants shared additional comments about their raise. “I’m a railroad conductor. My pay raises have been well publicized as of late,” wrote Shawn Seeley, who lives in Fort Collins.
He confirmed that he was part of the group of railroad workers who negotiated a 24% increase in pay over a five-year contract. He hasn’t had a raise since July 2019, so some of the negotiations included retroactive pay of 14% that was paid earlier this week. Another 4% is coming in July, he added.
“As you can imagine, going that long without a raise makes you feel like you’re falling behind with the kind of inflation we’ve experienced recently,” he said. “In turn, receiving a 14% raise all at once makes you feel as though you’ve won quite the prize. Truthfully though, our contracts have, overall, kept us ahead on inflation, and this one puts us back on level ground.”
Marnie Lansdown, office administrator for Freedom Service Dogs in Englewood, also received a sizable 13% pay raise. But for different reasons.
“I work in the nonprofit sector, and my organization just pushed pay up for virtually all hourly employees in an attempt to help staff get ahead of inflation,” Lansdown said. “The result is staff who are feeling good about the employer and are much more likely to stick around, as far as I can tell.”
But, of course, about 55% of respondents indicated they didn’t get a raise or aren’t planning to get one in 2023. For some, it was because they got a raise last year (“16% bump in 2022 due to a pay study,” one person said). Another person said they hadn’t been at their job very long so they weren’t expecting one. Others understood we’re going through a slowing economy, like 15% who picked the response, “I get it. Times are tough even for my employer.”
Others just responded “no,” or “I wish!”
But sometimes even a raise didn’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 no longer sufficient for maintaining life in Denver so I now feel that I need to move out of Colorado.”
But the year has just begun. There’s still hope. Lorie Thomas, who works as a part-time nurse in Pueblo, decided to ask for a raise after working for 14 months. Her employer told her OK but didn’t say how much it was going to be. She’s a PRN, or pro re neta, which means she works when needed.
“Apparently no one had even thought about it because they hadn’t had a PRN nurse stay that long,” Thomas said. “Tomorrow we shall see if the raise came through yet and what it is!”
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Other working bits
➔ Upcoming job fair: 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 being advertised with starting pay for a Correctional Officer 1 at “over $50,000/year.” >> Details, virtual registration
➔ Jobs still growing but slowing: Slower job growth was the economic mantra for 2022 and the last month of the year was no outlier. The U.S. added 223,000 jobs in December, according to the Department of Labor. That’s slower growth than in recent months but it means the U.S. continues to add jobs. The nation’s unemployment rate dropped to 3.5%, back to the lows before the pandemic. Colorado’s data will be released in two weeks. >> Report, NY Times
➔ Round of available EV credits in Colorado: A variety of public programs are aimed at offsetting the cost of buying an electric vehicle. Colorado Sun reporter Michael Booth takes you through what’s available. >> Read
➔ One week left to challenge terrible internet speeds: There’s $42.5 billion of federal funding available to help states invest in better broadband infrastructure — and provide more jobs — that will get more “unserved” households online faster. Colorado officials are encouraging residents with subpar service to check their status on the national broadband map. >> Read
☀ OUR RECOMMENDATIONS
Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
- What’s Working: Prepare for some new costs of being employed in 2023 in Colorado
- What’s Working: Colorado sees decline in labor force but job numbers are still better than U.S.
- What’s Working: Waiting for unemployment benefits in Colorado? It may now take up to 16 weeks
- What’s Working: Behind the new fee many Colorado workers and employers will see in 2023
- What’s Working: Thanksgiving meal inflation is higher in Colorado than U.S.
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
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