Business Confidence Improves Modestly Ahead of Q3 2026

• Leeds Business Confidence Index rises to 43.2 ahead of Q3 2026, though confidence remains below neutral.

• Inflation, cost pressures, political and policy instability, and geopolitical conflict continue to weigh on business sentiment.

• New survey findings examine how business leaders view Colorado’s regulatory burden.

• Read the report. 

Newswise — July 2, 2026—Colorado business leaders entered the third quarter of 2026 with modestly improved confidence, though expectations remain below neutral as inflation, political and policy instability, and geopolitical uncertainty continue to shape the business outlook.

The Leeds Business Confidence Index (LBCI), produced by the Business Research Division at the University of Colorado Boulder’s Leeds School of Business, increased from 41.9 in the second quarter to 43.2 ahead of the third quarter. All six components of the index improved from the previous quarter and were higher than a year ago, but each remained below the neutral benchmark of 50. A total of 214 business leaders responded to the survey between June 1 and June 19.

Respondents most frequently cited inflation, interest rates and general cost pressures (35%), political and policy instability (34%), and geopolitical events and global conflict (23%) as the primary reasons influencing their outlook. Nearly two-thirds of respondents (63%) said the balance of risks to their 2026 outlook remains tilted to the downside.

“The incremental increase in the outlook is encouraging, but the index illustrates the ongoing headwinds businesses are experiencing,” said Brian Lewandowski, executive director of the Leeds Business Research Division.

The largest quarter-over-quarter gains occurred in expectations for the national and state economies. The national economy component increased from 35.4 to 38.6, while the state economy improved from 34.7 to 36.9. Even with those gains, the state economy remained the lowest-rated component of the index for the fifth consecutive quarter. Industry sales remained the highest-rated component at 49.6, just below the neutral threshold.

Looking ahead to the fourth quarter, overall business confidence is expected to remain essentially unchanged. While expectations for the state and national economies improve modestly, forecasts for industry sales, hiring and capital expenditures soften slightly, leaving the overall index unchanged at 43.2.

The report also includes new questions examining business leaders’ views of Colorado’s regulatory environment. More than half of respondents rated the state’s regulatory burden as high or very high, while 68% perceived Colorado’s state regulations to be higher than those of neighboring states. Panelists identified taxation and fiscal burdens, permitting and development barriers, and energy and environmental regulations as the state’s top regulatory challenges.

Recent economic indicators present a mixed picture. Inflation in the Denver-Aurora-Centennial region increased 5% year over year in May, outpacing the national rate of 4.2%. Colorado employment remained nearly flat over the same period, while the state’s real GDP grew at an annualized rate of 1.4% in the first quarter of 2026.

The University of Colorado Boulder is Colorado’s leading public research university, transforming lives since 1876. As the state’s flagship university and one of only 38 U.S. public research institutions in the Association of American Universities (AAU), CU Boulder has proudly served Coloradans since the state’s founding. Home to five Nobel Laureates since 1989 and the only university to send space instruments to every planet in the solar system, CU Boulder provides a strong return on investment by aligning efforts to achieve research and creative excellence, global sustainability impact and the success of all students, faculty and staff. Learn more at colorado.edu/about.

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