For Immediate Release
May 29, 2009

BUSINESSES IN HARTFORD-SPRINGFIELD REGION SCALING BACK TO SURVIVE RECESSION, BUT STAYING PUT
New poll shows despite employing survival strategies most firms optimistic and taking actions that will prepare them for a recovery

The recession has taken a toll on businesses across the country, and Hartford-Springfield firms are no exception: 83 percent report that the recession has had a direct negative effect on their business. To remain competitive, many businesses in the interstate region have postponed capital spending (48 percent), cut their workforce (45 percent) or initiated hiring or pay freezes (39 percent). Only a handful (9 percent) have raised prices. In fact, more businesses have lowered prices to boost demand, and almost half (49 percent) have increased marketing efforts to prepare for recovery when the economy bounces back.

Those are some of the key findings in the 2009 Hartford-Springfield Regional Business Survey, released today. Commissioned by the Hartford-Springfield Economic Partnership (HSEP), the survey was conducted by the Connecticut Business & Industry Association (CBIA) and sponsored by Comcast Business Class and Kostin, Ruffkess & Co. It is a follow-up to the first survey in 2007.

The survey finds that economic competitiveness, taxes, regulatory burdens and the cost of doing business are high on Hartford-Springfield businesses’ list of concerns, while the region’s quality of life, educational institutions, and proximity to key markets rank high on the list of benefits.

The majority (61 percent) of business leaders cited the cost of doing business as the single greatest barrier to their continued success in the Hartford-Springfield region. The sluggish economic climate overall ranked a distant second (18 percent), followed by the region’s demographics and skilled workforce shortage (14 percent).

Somewhat encouraging is the fact that the proportion of businesses expecting to record a loss in 2007 and in 2009 has remained the same (23 percent), but the share of businesses expecting to record a profit dropped precipitously from 71 percent in 2007 to a projected 41 percent in 2009.

Perhaps the brightest news is that almost none of the businesses surveyed plan to shut down (2 percent). While 9 percent plan to sell their companies within the next five years, the vast majority (85 percent) expect to stay in business—and to stay in the Hartford-Springfield region.

“Though businesses here, as elsewhere, have been affected by the recession, they are capitalizing on the region’s assets and positioning themselves for an economic recovery,” said John R. Rathgeber, CBIA president and CEO. “Importantly, most companies surveyed expect to stay in business and to stay in Hartford-Springfield. For that to happen, policymakers in both states must focus on legislation that will support business, increase government efficiency, and invest in core areas vital to our region’s economy, such as education and transportation.”

Indeed, respondents from both Connecticut and Massachusetts believe their state legislatures must make changes to balance their budgets. More than three-quarters (77 percent) of businesses surveyed recommended structural changes to state government, including sunsetting, eliminating, or combining agencies and commissions. A significant majority (67 percent) also favor reducing government expenditures across the board.

“Businesses are clearly concerned with the overall cost of doing business and looking to cut expenses in order to remain profitable,” said Jeff Freyer, vice president of business services, Comcast Western New England Region.

Allan Blair, president and CEO, Economic Development Council of Western Massachusetts adds, “Concerns expressed about the high costs of doing business are timely as state governments struggle with decreased revenue and flirt with increasing costs to compensate. For our companies to grow when the economy improves, their costs must remain competitive. Fortunately, most businesses surveyed expect to successfully navigate these difficult times.”

The survey was conducted via e-mail in March 2009. There were 672 returned surveys, for a margin of error of plus or minus 3.4 percent.

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

The Hartford-Springfield Economic Partnership is dedicated to increasing cooperative efforts to more effectively position and advance the economic progress and livability of the interstate region north and south of the Connecticut-Massachusetts border along the I-91/Connecticut River Valley corridor. For more information, visit www.HartfordSpringfield.com.

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

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