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November 2007 — Vol. 85, No. 9

CBIA’s 3rd-Quarter Economic Outlook Survey

More execs expect U.S. downturn, but more also upbeat about own firms

 

More Connecticut business executives had an optimistic outlook for their firms and industries, even though many more expected the national economy to falter, according to CBIA’s economic outlook survey for the third quarter of 2007.

In the survey, 51% of respondents expected the national economy would worsen during the quarter, up dramatically from 25% in the second quarter and 19% in the first quarter. Only 9% of respondents to the recent survey expected the national economy to improve, while 40% expected it to remain stable — the lowest numbers reported for both categories in more than a year.

Despite fears of a national downturn, 35% of respondents expected conditions for their firms to improve, up from 31% in the second quarter, and 20% expected conditions at their firms to worsen.

Another sign indicating growth at Connecticut companies is that 27% said their workforce would increase, up 2 percentage points from the second quarter.

Most not seeing tighter credit

In light of the recent uneasiness about the subprime mortgage lending situation, respondents were asked if tighter credit conditions were affecting their businesses. Nearly three-quarters (73%) said no. Twenty-seven percent said yes; tighter credit conditions had caused lost sales (according to 65% of respondents), delays in business expansion (33%), higher interest rates (32%), and decreased spending on purchasing and production (28%).