While Colorado’s economy continues to outshine many other states, and the national economy itself, business leaders’ confidence continues its decline “sharply into bear territory,” according to the Quarterly Business and Economic Indicators report for the second quarter.

The report is prepared by the University of Colorado Boulder’s Leeds Business Research Division with the Colorado Secretary of State’s Office.

The number of new-business filings, 39,464 in the second quarter, was up less than 1% from Q2 2021, but it dropped 9.7% from the number of first-quarter filings. That’s a typical seasonal slowdown, Secretary of State Jena Griswold said during a Thursday press conference.

But perception is important in the business world, and many believe a recession still looms. With 50 being a neutral number, “The Leeds Business Confidence Index (LBCI) fell sharply into bear territory, decreasing from 53.9 ahead of Q2 2022 to 41.1 ahead of Q3 and 38 ahead of Q4,” according to the report.

That’s mainly because of inflation, continuing supply-chain issues, interest rate increases and the tight labor market, said Rich Wobbekind, senior economist and Leeds Business Research Division faculty director.

“We’ve just come out of two quarters in a row of a negative GDP (gross domestic product) growth, and that leads some to say we’re in a recession,” Wobbekind said. “That is not the technical definition of a recession. In fact, our view is that we’re not in a recession at this point in time.”

National GDP “contracted for a second straight quarter in Q2, shrinking at an annualized rate of 0.9%,” according to the report. “While Colorado recorded a year-over-year decrease of 1.9% in Q1, real GDP increased at an annualized rate of 3.9% in Q2.”

“Expectations are that 2022 overall GDP will be positive right now,” Wobbekind said. “The forward-looking forecast for the third quarter is running at about 1.5% for GDP growth. But this is still obviously a much more moderate-growth economy than we had in 2021.”

“Colorado’s economy continues to shine, even with the uncertainly at the national level and in the national economy,” Griswold said.

The number of business dissolutions in the second quarter, 11,753, increased 27% over the number in 2021, but fell slightly from the first quarter’s dissolutions of 12,831.

The number of corporations delinquent in their business fee flings increased 7.3% year-over-year in the second quarter, 145,954. The same was true for delinquent limited-liability companies, 538,712 in the second quarter, up 10.9% from 2021 and also up from the 524,081 delinquent LLCs in Q1.

Wobbekind said he’s been following an interesting trend both nationally and in Colorado: Private-sector jobs have far outstripped the growth in government jobs in recent years.

“Private-sector employment was at a record high, 5% above the prior peak with over 600,000 jobs, while government employment is still well below the previous peak, 500,000 jobs below,” said Wobbekind. “All of that is essentially the same at the local level.

“That explains a lot of the things you’re seeing in the newspaper and hearing about going back to school and (the difficulty) hiring teachers and keeping parks open.”

Jobs growth in Colorado remains strong. The unemployment level in June was 3.4% — 12 consecutive months of flat or dropping unemployment levels. The U.S. unemployment rate was 3.6% in June, the fourth straight month at that rate.

Colorado’s labor-force participation rate ranked second-highest in June, totaling 69.5%, which is also above the pre-recession level.

The state has fully recovered all the jobs it lost during the pandemic, but not for all sectors.

Leisure and hospitality, natural resources and mining and health care sectors “are still below their pre-2020 levels,” Wobbekind said.

“Colorado’s economy is doing much better than the nation’s as a whole,” Wobbekind said. “We’re certainly between 10 and 15 (in state rankings) on almost every indicator that’s out there.”

Economists predict Colorado will gain another 104,000 jobs this year.