Colorado business sentiment remains subdued in Q2

DENVER — Business sentiment among Colorado leaders remained subdued ahead of the second quarter of 2026, according to the Leeds Business Confidence Index from the University of Colorado Boulder’s Leeds School of Business.

The index fell 1.2 points from 43.1 in the first quarter to 41.9 in the second quarter. A reading of 50 is considered neutral. Four components, including sales, profits, hiring and capital expenditures, increased from the previous quarter, but all six components declined compared with the same period in 2025.

Industry sales and profits posted the highest readings at 48.9 and 46.0. Expectations for the state and national economies were lower at 34.7 and 35.4, respectively.

“The index is in a prolonged period of pessimism,” said Brian Lewandowski, executive director of the Business Research Division. “It is now recording the third-longest stretch in which Colorado business leaders have signaled a negative outlook in the index’s 23-year history.”

Business leaders cited geopolitical conflict, domestic political risk, economic volatility and swings in commodity and energy prices as key concerns.

Expectations for the state economy fell from 39.9 in the first quarter to 34.7 in the second quarter. National expectations declined from 41.3 to 35.4, the largest quarterly drop in the index. State expectations remained below national expectations, a pattern not seen since 2005.

Looking ahead, confidence is projected to improve slightly, with the index expected to reach 43.9 in the third quarter.

“The index results reflect the additional uncertainty brought about by the Middle East conflict,” said Richard Wobbekind, senior economist and faculty director of the Business Research Division. “The fact that the index bounces back slightly two quarters out may be an indication that the conflict is expected to end in a relatively short period.”

Sales expectations rose to 48.9 in the second quarter and are projected to exceed neutral in the third quarter. Profit expectations increased to 46.0 in the second quarter and 47.9 in the third.

Hiring expectations increased from 40.0 to 41.2, while capital expenditure expectations rose from 44.2 to 45.1. A plurality of respondents reported neutral or negative outlooks for both categories.

The survey included 213 business leaders and was conducted from March 2 to March 20. More than three-quarters of respondents said risks to their 2026 outlook were tilted to the downside.

The survey also found that nearly 45% of respondents use artificial intelligence daily and 69% reported productivity gains, most described as modest. Many expect AI use to increase.

The index is produced quarterly and measures expectations for the national economy, state economy, industry sales, profits, hiring and capital expenditures.