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December 2003 — Vol. 81, No. 10

CBIA survey: Economy to improve, capital spending to rise

 

Both the state and national economies will improve in the fourth quarter of 2003, according to businesses responding to CBIA’s latest economic outlook survey. Especially heartening is their predicted increase in capital spending.

“These are the most optimistic survey results we’ve seen since the 2001 recession,” says CBIA Economist Peter Gioia. “It indicates Connecticut is benefiting from the recent significant upturns in the U.S. gross domestic product and in national manufacturing output.”

Here are the key survey results:

  • Fifty-six percent expect the national economy to improve over the quarter, compared with only 41% last quarter and 18% two quarters ago. This quarter, only 11% think conditions will worsen, down from 19% last quarter.
  • Seventy-eight percent think the state’s economy will improve or stay the same, up from 59% last survey. And 30% now think it will improve significantly, up from only 15% last survey, while 23% say it will worsen, compared with 41% last survey.
  • Eighty percent expect conditions for their own firms to improve or stay the same during the fourth quarter, up from 71% last quarter and 62% in the second quarter.
  • Capital spending will increase over the fourth quarter, say 26% of respondents. But 48% expect to increase spending in 2004.
  • Fewer companies plan workforce cuts in the fourth quarter — 14%, compared with 22% last quarter. Nineteen percent now expect to increase hiring, and 67% expect no change.
  • Thirty-four percent expect sales or production increases during the fourth quarter; 54% foresee stable conditions; and only 11% anticipate decreases. In the past three surveys, 20% or more of the respondents expected declining sales or production.

The survey was conducted in October. The complete survey results appear online at cbia.com.