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DENVER – The Colorado Chamber today released the results of its second annual poll of Colorado businesses covering key economic and policy issues relevant to the statewide business community. The survey of 156 business leaders was conducted by Cole Hargrave Snodgrass & Associates, a nationally recognized firm with expertise in market research specifically for state chambers of commerce. Interviews were conducted from June 26 to July 28, 2023.
“Having conducted more than 50 studies of businesses in other states, this is the greatest concern about the regulatory climate that I’ve ever recorded,” said Pat McFerron, president at Cole Hargrave Snodgrass & Associates. “The concern about Colorado’s high cost of doing business is having real-world repercussions; we found that a striking number of businesses based in Colorado are considering expansions and investments elsewhere. Cost of living and housing concerns are also presenting a significant burden to attracting and retaining workers – more so than what I see in other states. Together, these findings underscore a declining sentiment among business leaders about the direction of Colorado’s economy.”
“This report is consistent with the many conversations we’ve had with Colorado business leaders,” said Colorado Chamber President and CEO Loren Furman. “Lawmakers need to understand that every new regulatory burden coming from the capitol has a real impact on jobs and economic growth. The data is clear – we’re losing out to other states because of our business climate, which is chipping away at our competitiveness and driving businesses to invest in other states.”
Key findings of the survey:
- The mood of Colorado business leaders has soured in the past year. Currently, only four in ten (40%) believe the state’s economy is headed in the right direction while 60% say it is on the wrong track. This is a net change of 13-points in the negative direction since last year (46% Right Track / 53% Wrong Track in 2022).
- When asked an open-ended question as to the most important issue facing Colorado businesses, almost half (48%) mention regulations. Workforce needs are a distant second (11%). In the Chamber’s 2022 survey, regulations and workforce issues were roughly tied at 26% and 27%, respectively.
- The concern about regulations is reconfirmed when respondents select from a list the biggest challenge facing their business. Here, 25% select regulatory mandates and costs as their top concern, almost doubling those selecting finding and retaining skilled employees (14%) or affordable or attainable housing (14%). Fully 65% say regulatory compliance was one of their top three issues when asked to choose from a list of 13 items.
- The bulk of the regulatory concern is with state government. When asked what level of government creates the greatest regulatory burden, 64% say it is the state while only 15% say it is the federal government and 15% say it is the local government level.
- When asked about the most costly labor and employment regulations impacting their companies, 57% of respondents pointed to the state’s new paid family and medical leave insurance plan. This overtakes traditional areas of concern like unemployment, workers compensation insurance, and even minimum wage. There is also heightened concern about the cost of sick leave mandates (27%) and wage transparency rules (26%).
- Down from the 66% recorded last year, the challenge of filling positions still exists as 48% report having job openings that are difficult to fill. This is particularly strong among companies with more than 100 employees (65%) and manufacturers (65%).
- Colorado businesses are addressing the workforce shortage with 77% saying they have increased employee compensation in the last year. This follows 76% who said they had done so in the previous year. This is higher among those whose primary activities are in the Denver area (85%) and manufacturers (88%).
- Blame for not being able to attract and retain workforce talent centers around the related high cost of living (76% say it is in the top two concerns) and housing attainability (53% say it is in the top two concerns). Issues like infrastructure (10% in top two), and availability of childcare (10% in top two) trail these other aspects by very wide margins.
- Likely because they recognize the need for more attainable housing, 85% of respondents support at least some effort to improve affordability and availability of housing in the state. Fully 42% favor economic incentives like grants, tax credits, or property tax relief while 43% support reforms to the home building, zoning, and development processes.
- When asked about Colorado’s business climate compared to other states, 63% of business leaders believe that Colorado’s business environment is more costly or burdensome than in most other states. This number is even more elevated among businesses with out-of-state operations; 72% of those with experience working in other states say Colorado is more costly.
- The concern about the cost of doing business in Colorado is having real-world repercussions. When asked about future investments being made by their company, 46% say at least some of those investments will be made out of state. Among those already operating in multiple states, that number hits 83% while only 17% say they intend to solely invest in Colorado.
- The primary reason Colorado business leaders have hesitancy in investing in Colorado has to do with the regulatory costs in the state. Among all respondents, 29% identified regulatory costs as the reason why they are hesitant in choosing Colorado while 17% said there are more favorable business climates in other states. (The figures for companies with experience in other states are even higher; 39% say regulatory costs are the primary reason and 28% say there are more favorable business climates in other states.)
The Colorado Chamber presented the results of its 2023 survey to state legislators in a briefing and will use the findings to shape its 2024 policy agenda.
To view the survey report, please visit: https://cochamber.com/wp-content/uploads/2023-Business-Survey.pdf
View the results of the Chamber’s 2022 report here: https://cochamber.com/2022/10/17/survey-regulatory-burden-a-top-concern-for-colorado-business-leaders/
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The Colorado Chamber of Commerce champions free enterprise, a healthy business environment and economic prosperity for all Coloradans. It is the only business association that works to improve the business climate for all sizes of business from a statewide, multi-industry perspective. What the Colorado Chamber accomplishes is good for all businesses, and that’s good for the state’s economy. It was created in 1965 based on the merger with the Colorado Manufacturers’ Association.