For Immediate Release
Dec. 31, 2008

 

RECESSION HURTING CONNECTICUT BUSINESSES
Future outlook is pessimistic

 

The severity of the year-long national recession is starting to have a more direct affect on Connecticut businesses, and executives view the national and state economies as equally bad. Businesses are reporting record-low production and sales numbers, and future prospects for their companies are dim. Many businesses must reexamine their workforce and make necessary reductions to reduce costs and remain competitive.

Those are some of the key findings of the Connecticut Business & Industry Association's (CBIA's) fourth-quarter 2008 economic survey.

The majority of respondents (90 percent) expect the national economy to worsen, and an even greater number (92 percent) expect that the state economy will get worse.

“In the past year, businesses across the country have been hit much harder than those here in Connecticut,” said Peter Gioia, CBIA vice president and economist, “but the numbers in this survey show that state companies are now being affected and are struggling in this recession just like their counterparts across the country. And most don't expect Connecticut 's economy to improve anytime soon.”

Only two percent of respondents expect the state's economy to improve, while five percent expect the national economy to improve. Respondents were also pessimistic about the outlook for their own industries. Sixty-six percent expect conditions to worsen for their own industries, up from 56 percent last quarter and 35 percent a year ago. Only six percent expect conditions to improve for their industries, down from 19 percent a year ago.

Production and sales numbers are at the lowest point in several years, and more than 50 percent of respondents expect further decreases in the coming months.

When asked to predict their workforce needs over the next 12 months, 17 percent said they plan to increase the number of workers while 44 percent expect their workforce to remain the same. But 39 percent said they expect to make cuts over the next 12 months.

And while the majority of respondents don't expect to hire in 2009, 38 percent believe it would be easy to find qualified workers.

“Because of the layoffs in many industries, for the first time in over a decade, highly-trained workers will be available for many firms that have been unable to find the skilled labor needed to grow their businesses,” said Gioia.

Gioia added that the gloomy survey results echo many economists' predictions that the U.S. will be entering a more severe phase of the recession in 2009.

"In order to weather the storm, businesses need to seriously evaluate their current situation and business prospects and be prepared to find and seize market opportunities and hire new talent, which will be available,” said Gioia. “Those who decide to simply hunker down will miss opportunities that always emerge in times of change.”

The survey was conducted by mail and e-mail in mid-December. There were 349 questionnaires completed for a 12.7 percent response rate and a margin of error of 5.3 percent.

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Editor's Note: For a complete copy of the survey, visit www.cbia.com/newsroom/surveys.

CBIA is the state's largest business organization, with 10,000 member companies.

 

For more information contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com.

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