While Colorado continues to outperform the nation and most states in job recovery and growth, business owners are decidedly glum about the future, a midyear economic report by the University of Colorado Boulder Leeds School of Business released Friday shows.

The latest Colorado Business Economic Outlook shows Colorado with the second-highest labor force participation rate in the country. The CBEO projects the state will add 104,000 jobs this year; that’s 30,000 more than the CBEO forecasted for the year in its annual report released in December.

But business owners see trouble ahead.

Despite Colorado being “a leading state in the national economy,” the Leeds Business Confidence Index showed small business owners’ confidence in the economy falling due to concerns including inflation, the Federal Reserve’s strategy to combat rising prices by increasing interest rates, supply chain issues and the war in Ukraine, said Brian Lewandowski, executive director of the Leeds Business Research Division. The confidence level measured by the index is the fifth lowest it has been in the 20-year history of the index. 

“We’re keeping a close eye on a number of headwinds in the economy,” Lewandowski said. “… The risk of a recession is growing, and it could begin in late 2022 or early 2023 if that occurs. However, we do expect this event to be relatively very shallow and short.” 

The Leeds School of Business’ midyear economic report synthesized information about the labor market and 14 economic sector across the state along with population growth and several other metrics. Here are some of the biggest takeaways from the report: