Colorado business owners believe strongly the state is on its way to a “sustained economic recovery,” according to University of Colorado Boulder’s Leeds Business Confidence Index study released Thursday.

The study surveyed 250 Colorado business owners in June and covered six key areas: state economy, national economy, industry sales, industry profits, industry hiring and capital expenditures.

The highest confidence marks were in response to the state economy, where 92% of owners surveyed reported they believe Colorado’s economy will stay “neutral-to-positive” in the third quarter. The school has conducted the study since 2003.

“The good news for us to share is the index has stayed at record-high levels for Q3,” Brian Lewandowski, executive director of the school’s Business Research Division, said at a news conference Thursday. “There’s across the board optimism across all six (areas) … The optimism is still at record levels – very high levels.”

More than half of companies reported sales had either never decreased or had already returned to pre-pandemic levels. The remainder of the business owners surveyed reported they expected to see recovery in the second half of the year and into 2022.

“Panelists did cite concerns about worker shortages, inflation and the supply chain,” the study noted. “Inflation in the Denver-Aurora-Lakewood area increased 3.2% year-over-year in May compared to 5% nationally.”

Pressed to explain the worker shortages, some survey respondents indicated the state’s unemployment benefits sometimes are higher than lower-wage jobs.

“Right now in the U.S. economy, there are 9 million less people working than when we went into in” the pandemic, said Richard Wobbekind, senior economist and faculty director of the Business Research Division. “Women have pulled back in labor force participation, older folks are retiring. There were a significant chunk of retirement aged folks that seemed to say ‘this is a good time to do it’ when the pandemic hit. These are longer-term issues for the labor shortage.”

Lewandowski cited reasons for the overall survey confidence: “Normalization of the economy drove the responses, which includes increased demand, decreased COVID cases, increased vaccination rates, increases in sales and the rebound of the state’s tourism industry.”

Colorado experienced 7.5% year-over-year employment growth, and the unemployment rate dropped in May to 6.2%. But Colorado still ranked in the lower half of other states by those measures.

“If you just benchmark Colorado against itself, it looks like pretty well-paced growth,” Lewandowski said. “But when you benchmark us against other states, it looks a little below average.”

Other study highlights:

• The rebound in the labor market through May left Colorado with a smaller jobs deficit than the nation (?3.9% versus ?5%) and ranked the state 30th in the nation for year?over-year performance in May.
• Colorado’s real gross domestic product (GDP) fully recovered from the recession in Q1 2021, recouping all of the losses from the recession. “Colorado’s GDP came back faster than the national GDP,” Wobbekind said.
• Many of the survey respondents have already returned to the office, but many more expect to return to the office in the third quarter of 2021.
• A majority of those surveyed expect their company’s employment to reach pre?pandemic levels sometime between Q3 2021 and Q4 2022.
• “The survey illustrates that remote work is moderating from the pandemic peak but will generally remain a part of the work culture,” the study states.

The study is available for download.