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June 30, 2003 View of National Economy Brightens, HARTFORD, Conn. – Connecticut business people are increasingly optimistic about the national economy, but that optimism doesn’t extend to their views of the state economy, their industries and their own businesses, according to the newest quarterly survey conducted by the Connecticut Business & Industry Association. Forty-one percent of those responding to the CBIA survey, conducted in June, said they expect the national economy to improve in the third quarter of 2003, compared with 18 percent expressing that view in the previous survey. Similarly, the number of respondents expecting conditions to worsen plummeted from 53 percent in the previous survey to 19 percent. “The data show that there’s a significant positive change in people’s outlook when it comes to the national economy,” said Peter M. Gioia, economist, CBIA. “Optimism is a key building block for recovery.” That optimism is somewhat muted when it comes to conditions closer to home. In the latest survey, 15 percent of respondents said they expect to see improvement in the third quarter compared to 12 percent in the second. Forty-four percent expect conditions to stay the same. But, in the previous survey 62 percent said they expected conditions to get worse while only 41 percent of those responding to the latest survey expect worsening conditions. Respondents’ opinions about their own companies were similar to those expressed in the previous survey, as 31 percent said they expect conditions to improve in the third quarter, unchanged from the previous quarterly survey. Meanwhile, 44 percent said they expect conditions to remain the same, up from 42 percent in the previous survey, and 25 percent said they expect conditions to worsen, compared with 27 percent in the previous survey. The job outlook remains cloudy. Twenty-one percent of respondents said
they expect their firms’ work forces to decrease in the third
quarter, compared with 18 percent in the previous survey, while 14 percent
said they expect increases in the third quarter, compared with 15 percent
who predicted increases in the previous survey. “This is a classic early response when coming out of an economic downturn,” Gioia said. “Companies are wary of hiring full-time workers until they are certain that the pickup in business is sustainable.” Looking farther ahead, indications remain mixed. Twenty-six percent of respondents said they expect their companies to increase their work forces by Jan. 1, 2004, while 28 percent said they expect their companies to reduce head counts and 45 percent said they expect the size of their companies’ work forces to remain stable. “These results indicate that the Connecticut economy will see both job growth and cutbacks in the recovery,” Gioia said. “It shows that sustained job growth will be a challenge for some time to come.” Production and sales outlooks show slight improvement from the previous 2003 surveys. Thirty-three percent of those responding predict increases in sales or production in the third quarter of 2003, compared with 32 percent who made that prediction for the second quarter of 2003 and 29 percent for the first quarter. Forty-six percent foresee stable conditions in the third quarter. Twenty-one percent expect to see production or sales decreasing in the third quarter, compared with 21 percent making that prediction for the second quarter and 26 percent for the first quarter. To conduct the survey, CBIA mailed or e-mailed surveys to 2,000 executives around the state in June. A total of 313 surveys were returned, for a return rate of 15.7 percent and a 5.65 percent margin of error. This survey is a projection for the next three months. CBIA is Connecticut’s largest business organization, with over
10,000 members. CBIA’s mission is to create a competitive business
climate that leads to economic growth and job creation.
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