While Colorado business leaders remain optimistic and the Colorado economy is recovering faster than most other states, concerns about inflation, supply chain woes and the Ukraine-Russia conflict have dinged their confidence, according to a report issued Friday by the Colorado secretary of state and the University of Colorado in Boulder.

Authors of the CU’s Leeds Business Confidence Index surveyed 195 Colorado business officials representing all business sizes and industry types in early March. The report “captures Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditures.”

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“Colorado’s employment surpassed the prerecession peak in February of this year,” said Rich Wobbekind, senior economist and faculty director of the Business Research Division, in a news release. “The state’s employment recovery has outperformed the nation, and six of Colorado’s seven metropolitan statistical areas rank among the top 100 nationally for employment growth.”

The index dropped 4.1 points to 53.9 ahead of the second quarter, but a score of 50 is neutral – so that means leaders remain positive, or optimistic. Out of the six expectations measured, only the “national economy” outlook was below 50, at 40.4.

“The gap between the state and national outlook widened to 11.5 points, the greatest gap in nine years,” report authors noted.

Wobbekind and Brian Lewandowski, executive director of the Leeds School of Business Research Division Leeds Business Research Division, fielded questions from reporters at a press conference Friday.

“For the past few years, COVID-19 was their top concern, or second,” Lewandowski said of business leaders. “Now that cases are dropping, the economy is opening up and traveling has resumed, business leaders are talking about it less. But as we exit one crisis, another looms and COVID has now taken a backseat to the Russia-Ukraine conflict as the top concern, and inflation.

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“Workforce constraints are casting a shadow of uncertainty in the near future for companies.”

More than half of the survey respondents expected to spend more on wages to help employees keep up with rising inflation, and most didn’t expect inflation to stabilize until after 2023. Colorado’s inflation rate is projected to increase to 7.3% in 2022, slowing to 2.8% in 2023, according to the report.

“Colorado is still outperforming the nation,” Lewandowski said.

He pointed to Colorado’s employment recovery outperforming the nation, as it passed the pre-recession peak in February – increasing .2% above the pre-recession peak. That puts Colorado’s recovery at 11th in the nation.

“Colorado nonfarm employment decreased 13.3% (-375,200 jobs) from January 2020 to April 2020 but increased 381,800 jobs from May 2020 through February 2022,” according to the report. “Colorado effectively recouped jobs lost due to the pandemic, reaching a new record for jobs in the state in February.”

The states GDP (gross domestic product) increased 6.3% year-over-year in December, which puts the state 12th in the nation.

“Some businesses are seeing record-breaking numbers, yet they don’t feel good about anything,” said Wobbekind. “They’re positive, but not hugely positive.”

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As spending shifts from goods back to the service sector, Colorado should be in a good position to capitalize with its tourism and outdoor recreation industries.

“We’re still seeing phenomenal growth in sales tax – double-digit (percentage) increases in some cases,” Lewandowski said.

The school has done the report for 19 years.