Colorado business leaders headed into the second quarter with a clear case of nerves, as the state’s Leeds Business Confidence Index slipped back into negative territory. The quarterly snapshot, taken in early March, captured firms wrestling with the late‑February escalation in the Middle East and a jump in local fuel prices that knocked around planning and spending decisions.
According to a report by CU Boulder's Leeds School of Business, the index fell to 41.9 from 43.1 in the prior quarter, with 50 considered neutral. The Business Research Division surveyed 213 Colorado executives between March 2 and March 20, 2026, a period that overlapped with early strikes in the U.S.-Israel campaign against Iran. The report also noted quarter-to-quarter gains in industry sales, profits, hiring plans, and capital expenditures, even as overall sentiment stayed stuck below neutral.
Local economists say the slide reflects an economy that is still highly sensitive to outside shocks. CU Boulder economist Brian Lewandowski said, “Business leaders are signaling that they are getting more used to operating in an environment where there is uncertainty,” and the survey ranked this stretch of pessimistic readings among the longest in the index’s history. As detailed by CU Boulder's Leeds School of Business, respondents pointed to geopolitical conflicts (48%), domestic policy shifts (38%), and energy-price volatility (20%) as the main reasons for their caution.
National and state outlooks took the biggest hit
The Leeds breakdown shows the national-economy component slipping from roughly 41.3 to about 35.4, while the state outlook dropped from roughly 39.9 to about 34.7. Those were the largest declines among the six components measured. That pullback in national and state expectations was the primary reason the overall index landed just under 42, according to the Leeds Business Research Division’s second-quarter release. The data suggest confidence remains fragile even as some company-level indicators are moving in the right direction.
How businesses say they'll respond
The survey found Colorado firms already talking about tactical adjustments: tighter spending limits, faster adoption of productivity tools, including artificial intelligence and efforts to diversify revenue streams. If those moves spread, they could cushion some of the short-term downside while quietly reshaping investment and hiring plans across industries in the months ahead.
Still, the index is markedly better than the very low readings seen a year ago, and economists warn that longer-running headwinds such as a slowing population trend and policy uncertainty could keep growth uneven. The Leeds report and local coverage describe an economy managing through yet another wave of uncertainty rather than a sudden collapse, but companies say they expect to act more conservatively while the situation plays out, per the Denver Gazette.
