For Immediate Release
September 23, 2008

 

 

BUSINESSES IN CONNECTICUT'S NORTHWEST HILLS SHOWING VITALITY DESPITE UNCERTAIN NATIONAL ECONOMY
Region faces unique challenges important to growth

 

Businesses in Connecticut's northwest corner have performed well over the past year, despite the national economic downturn. These companies are cautiously optimistic about their continuing ability to compete and grow but are less confident about the overall state and national economies.

Litchfield County businesses share many of the same challenges as their counterparts throughout the state, including the high cost of doing business, rising energy and health care costs, and a shortage of skilled workers. Nevertheless, regional business leaders have a generally positive view of the area as a desirable place to live, work and operate a business. They believe the breadth of arts, culture and tourism in the region has a significant positive impact on their businesses.

These are some of the findings of a new survey conducted by the Connecticut Business & Industry Association (CBIA) in collaboration with the Chamber of Commerce of Northwest Connecticut. The 2008 Survey of Northwest Connecticut Businesses examines the region's business climate and major economic factors that shape companies' ability to compete there.

"This survey fills an information void for businesses that may be interested in joining our community,” said Joseph J. Greco, president and CEO, The First National Bank of Litchfield. “It contains the insights of successful businesses large and small that have prospered in our region, and the results will help us build consensus on addressing and finding solutions to the region's challenges.”

Business generally has been good for companies in the northwestern Connecticut region. Nearly 40 percent of respondents described their companies' current business conditions as good or excellent, 34 percent as average and 28 percent as fair or poor. And in the last 12 months, 21 percent of businesses increased their full-time workforce and 66 percent were able to maintain their staffing levels.

Employers are also generally optimistic about the prospect for good business conditions over the next 12 months. Forty-one percent of respondents expect the economic outlook for their businesses to improve and only 21 percent expect it to worsen. Twenty percent believe they will increase their full-time workforce in the next year, 72 percent anticipate no change and 8 percent expect a decrease. Another positive economic sign in the region is that the majority (56 percent) of respondents plan to expand their businesses over the next five years. One factor in the potential for the region's economy to grow is the availability of commercial land and buildings.

"Litchfield County is known for its quaint inns and rolling hills, but the area's vibrant business community is also a major contributor to the region's excellent quality of life,” said John R. Rathgeber, CBIA president and CEO.

Manufacturing is believed to be the most important industry to the region's future for almost a third (29 percent) of respondents. Others identified technology (22 percent), arts, culture and heritage (16 percent), hospitality and tourism (13 percent), farming and agriculture (10 percent), and the film industry (3 percent) as most important.

More than half (51 percent) of businesses said arts, culture, and tourism in the region have a significant impact on their businesses. Almost a third (30 percent) said the region's tourism industry has grown in the past 12 months, and even more (35 percent) expect continued growth next year.

Many of Litchfield County's challenges are similar to those facing businesses in other parts of the state. Respondents identified energy (31 percent), health care (31 percent), the lack of economic growth (23 percent), finding or attracting qualified workers (21 percent), state regulations and lack of government support (12 percent), and transportation and infrastructure issues (6 percent) as their biggest challenges.

"There are very real challenges facing these businesses and the region's long-term economic vitality that must be addressed so businesses can continue to be competitive and create jobs,” said Rathgeber. “State policymakers must help businesses in the region keep their competitiveness in the downturn and give them the tools they need to grow—from lower costs to a plentiful supply of skilled workers and improved transportation resources.”

When asked about the biggest challenges they will face over the next five years, 81 percent of business leaders identified the cost of doing business, followed by energy costs (16 percent) and taxes (16 percent).

More than half of respondents (56 percent) are dissatisfied with the price, reliability and availability of energy and electric power in the region, and many have taken steps to reduce their own energy use and costs. More than three-quarters (76 percent) believe it's important to upgrade the state's electricity transmission system.

Higher energy prices have already affected business productivity and growth, as more than a third (35 percent) of respondents said they have had to increase prices for their products and services because of rising energy costs. Others said increased energy costs have diminished their ability to expand their businesses (19 percent) or hire additional workers (12 percent).

Transportation and infrastructure issues are another challenge for northwest Connecticut companies and the vast majority (79 percent) of respondents say improvements are important to maintaining a healthy business climate in the region. The most pressing transportation issues cited are the need for accessible and affordable mass transit (52 percent), the increase in travel and freight expenses due to the rising cost of gasoline (23 percent), and the need for better highway and road system and maintaining the existing infrastructure (19 percent).

What could be done to improve the region's economy? Top priorities, said respondents, are gradual and responsible economic growth (95 percent) and job creation (94 percent). Encouraging the growth of the region's tourism industry (83 percent), improving the transportation infrastructure (76 percent), proving affordable housing (72 percent), and encouraging large-scale investments (68 percent) were also given high importance.

"The optimism evident throughout the report, despite the challenges noted, is an example of the collaboration that continues to grow among our business organizations and leaders,” said JoAnn Ryan, Northwest Connecticut Chamber of Commerce president and CEO. “We must continue working together to make northwestern Connecticut a better place in which to live and work.”

CBIA received 489 completed surveys from companies in the northwestern Connecticut region. The survey has a margin of error of plus or minus 4.5 percent.

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For a copy of the survey, visit www.cbia.com/newsroom/surveys.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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