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For Immediate Release
September 6, 2007

 

CBIA/BLUM SHAPIRO SURVEY OF CONNECTICUT BUSINESSES FINDS COMPANIES FACING NUMEROUS ECONOMIC CHALLENGES BUT DETERMINED TO SUCCEED

 

Connecticut businesses are facing numerous and complex challenges that affect their ability to succeed in today's highly competitive marketplace. Yet despite these hurdles, business executives are convinced of the many rewards and advantages available in Connecticut and are developing new products to help them grow and prosper. The challenges facing companies in Connecticut include the high cost of doing business, rising health care and energy costs, and workforce issues such as the retirement of the baby boomer generation and the lack of qualified workers to replace them.

Those are some of the key findings 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. A strong Connecticut economy depends in great part on the strength of small and midsize businesses. This survey discloses important insights into the competitiveness of these businesses that can help state policy-makers identify ways to improve Connecticut 's economic climate.

"Connecticut businesses want to continue growing and investing here, creating more jobs and providing a good quality of life for the people and communities of the state,” said John R. Rathgeber, CBIA president and CEO. “In order to do that, they are hopeful that state policy-makers will help by addressing their biggest concerns, from business costs to energy to affordable housing. Connecticut 's economy will thrive in an environment that fosters innovation and offers lower business costs to complement the state's many strategic advantages.”

Advantages to doing business in Connecticut
According to survey respondents, those advantages include Connecticut 's high quality of life (37 percent), its location between New York and Boston (23 percent), personal satisfaction (17 percent), and its close proximity to markets and suppliers (10 percent).

Biggest Challenges
Executives' biggest concern is the continued high cost of doing business in Connecticut. For a fourth straight year, health care benefits, which continue to rise sharply, were ranked the top cost concern of respondents (50 percent).

Other significant cost concerns include payroll (26 percent), energy (11 percent) and workers' compensation costs (9 percent). Taxes are another major concern for businesses. These include personal (24 percent) and corporate (17 percent) income taxes, unemployment compensation taxes (15 percent), property taxes on real estate (21 percent) and personal property taxes (12 percent).

Seventy percent of executives believe the value they receive for their tax dollars is extremely low and out of proportion with the taxes they pay, and that policy-makers must do more. Sixty-five percent said they would like to see the state do more to encourage economic growth by reducing the cost of doing business in Connecticut, reducing taxes and offering tax credits (46 percent), improving transportation and infrastructure (30 percent), improving the state's regulatory climate (25 percent) and encouraging business investment (22 percent).

Energy Costs
Connecticut businesses are actively seeking ways to reduce energy costs. Three-quarters (75 percent) of respondents said they had taken steps to reduce energy use, up from 50 percent just two years ago. Many (69 percent) report replacing light fixtures, adjusting or updating HVAC systems (49 percent), conducting energy audits (27 percent) and installing non-lighting energy-efficient equipment (26 percent) as ways to conserve energy.

Workforce Issues
As businesses plan for future growth, they need a steady stream of qualified workers to fill new positions and replace retirees. Over the last 12 months, three-quarters (75 percent) of businesses reported hiring new workers, and almost as many (70 percent) expect to do the same in the coming year.

But despite this constant need to hire employees, two-thirds of respondents said they were having a difficult time finding qualified workers and expect the problem to get worse. The primary reasons cited were a shortage of qualified applicants (76 percent), the high cost of living in the area (58 percent), high housing costs (45 percent), a lack of job-readiness (35 percent) and a long commute for workers (17 percent).

"Business leaders need to ask: ‘What are we doing to recruit young, qualified workers?' We know there is a shortage of them. While some companies have strategies for finding and holding onto young talent, plenty don't and some hope the state will step in to help,” said Carl R. Johnson, CPA, managing partner, Blum Shapiro.

Efforts to attract and retain qualified workers include recruiting at local colleges, at job fairs, and online, as well as continuing to offer competitive benefits, including paid vacation, retirement plans, training and bonuses.

Methodology
The survey was sent to Connecticut companies in May and June 2007. A total of 967 surveys were returned, for a response rate of 14 percent and a margin of error of plus or minus 3 percent.

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

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

Blum Shapiro is the largest regional accounting and business consulting firm based in Connecticut and one of the largest in New England.

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

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Phone: (860) 244-1900 · Fax: (860) 278-8562

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