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For Immediate Release
BUSINESS SLOWING FOR STATE COMPANIES The Connecticut Business & Industry Association’s (CBIA) second-quarter 2006 economic survey finds that Connecticut business executives were cautious about the future growth of the state and national economies and their own firms. They reported a slowdown in production and sales, which were affecting their company’s productivity levels. Forty-one percent of business respondents reported an increase in production and sales. That’s down from 58 percent the previous quarter and 44 percent a year earlier. “While they’re down from the strong numbers in previous surveys, production and sales activity is still in good shape and showing growth,” said Peter Gioia, CBIA vice president and economist. “The real concern is that business executives are uncertain about the economic vitality of the state and national economies.” Only 7 percent of business respondents expected the national economy to improve over the next three months, down 17 percentage points from the first quarter and the lowest number since the beginning of 2005. And 44 percent expected it to worsen. That’s up from 25 percent in the first quarter and 20 percent a year earlier. Executives believed the state economy would fare a bit better. Nine percent expected the state economy to grow over the next three months. That’s down from 13 percent from the previous quarter and 18 percent a year earlier. And 40 percent expected it to worsen, compared with 32 percent the previous quarter and 33 percent a year earlier. Negativity about the economy trickled into respondents’ outlooks for their own firms and industries. There was a significant drop in the number of companies expecting their firms to improve. Only one-third (33 percent) of executives expected their firms to improve over the next three months. That’s down from 46 percent in the first quarter. A little more than half (52 percent) expected conditions to remain the same, and 16 percent expected them to worsen. That’s up from 44 percent and 10 percent the previous quarter. The surge in energy prices had businesses taking steps to help minimize costs and conserve power. Business executives said they were participating in energy conservation and energy efficiency programs (43 percent), taking steps to budget energy costs and make price adjustments (34 percent), as well as changing travel policies to help save money (19 percent). “Based on the overall results of the survey, we can expect business executives to take a much more cautious approach as we move toward the end of the year,” said Gioia. The survey was mailed or e-mailed in late July 2006 to 2,000 business executives around the state. The survey has a response rate of 13 percent and a margin of error of plus or minus 6.1 percent. CBIA is the state’s largest business organization, with 10,000 members. ### Editor’s Note: For a copy of the survey, visit www.cbia.com/newsroom/surveys. To arrange an interview with Peter Gioia, CBIA vice president and economist, or for more information, please contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com. 350 Church
Street · Hartford, CT 06103-1126 · cbia.com/newsroom
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