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For Immediate Release
CONNECTICUT MANUFACTURERS FACING OBSTACLES THAT COULD
Manufacturing is a major component of Connecticut 's economy and vital to the state's future prosperity, but the industry is facing numerous hurdles that could impact the future of manufacturing in the state. The availability and sustainability of a skilled workforce, worries about future business and economic conditions, and the cost of doing business in Connecticut are among the biggest challenges facing manufacturers. But despite these barriers, manufacturers are expanding, developing new products and realizing profits. Those are some of the key findings of the manufacturing supplement of the 2007 Survey of Connecticut Businesses, released today by the Connecticut Business & Industry Association (CBIA) and Blum Shapiro, the largest regional accounting firm in the state. The supplement highlights the issues confronting manufacturing businesses in Connecticut and helps to increase awareness of what needs to be done to ensure that they can remain healthy and competitive well into the future. "Connecticut manufacturers are facing myriad challenges, both domestically and internationally, but are highly innovative, resourceful and resilient even in the face of those challenges, said John R. Rathgeber, CBIA president and CEO. It's critically important that state policy-makers foster a business climate in which manufacturers find solutions to those challenges so they can continue to innovate, grow and succeed. Cost of doing business The greatest challenge to manufacturers in Connecticut is the high cost of doing business in the state. Manufacturers said their most onerous costs were those for:
In addition, their most significant tax concerns were the:
"For the fourth straight year, manufacturers are worried about the high price of doing business in Connecticut, said Brian Renstrom, partner at Blum Shapiro Consulting LLC. We know this is a problem. We know state leaders are aware of it. But manufacturers need to take the initiative and figure out what each company can do to streamline its processes and encourage growth. Shortage of skilled workers Another growing challenge for manufacturers is the availability and sustainability of a skilled workforce in the state. While nearly three-quarters (74 percent) of manufacturing companies hired new employees in the last year and almost as many (73 percent) expect to hire in the next 12 months, the majority of them (70 percent) reported trouble finding and attracting qualified workers. More than half (56 percent) of respondents said they could not find enough qualified workers to fill jobs. Other hiring barriers cited were the region's high cost of living (40 percent) and housing prices (31 percent), a lack of job-readiness skills (24 percent), and a long commute (12 percent). Compounding these challenges is the fact that many baby boomers will soon begin to retire. Ninety-seven percent of manufacturers expect 10 percent of their workforce to retire this year; 95 percent expect that same percentage will retire next year. "Our manufacturers are at a crossroads, Said John M. Kirschner, partner and director of the Manufacturing/Distribution Industry Group at Blum Shapiro. They are quick to invest in new technologies to grow their businesses, but they're running out of qualified workers. It's time for business owners and managers, state officials and legislators, and educators to evaluate what they're doing to appeal to, or even reach, potential new workers. Profitability and the economy But despite the challenges, Connecticut manufacturers are innovating and actively seeking ways to improve their businesses and turn a profit. Nearly three-quarters (72 percent) of respondents said their firms recorded a net profit in 2006, but they were less confident about future business and economic conditions in the state. One-quarter (25 percent) of manufacturing executives expect business conditions for their firms to be poor or fair in the next 12 months. Less encouraging were respondents' views of the manufacturing industry as a whole. Forty-one percent said that current business conditions for manufacturing are poor to fair, while 37 percent reported average conditions. "Manufacturers are persevering through many difficult challenges and we need to do all we can to make sure manufacturing continues to grow and to be one of Connecticut 's great economic strengths, said Peter Gioia, CBIA vice president and economist. Methodology The survey was sent to Connecticut companies in May and June 2007. A total of 967 surveys were returned, 214 of which were from manufacturers, representing 22 percent of respondents, with a margin of error of plus or minus 7 percent. ### CBIA is the state's largest business organization, with 10,000 members. For a complete copy of the survey, visit cbia.com/newsroom/surveys. For more information 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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