Insert graphic here:
width: 175px
height: 64px
 |
|||||
 |
 |
 |
 |
 |
 |
|
For Immediate Release
CONNECTICUT BUSINESSES OPTIMISTIC DESPITE ECONOMIC SLOWDOWN
The U.S. economic slowdown is affecting consumers and businesses across the country much harder than those right here in Connecticut . The state economy has been able to maintain very slow and steady growth, in part because Connecticut did not overbuild during the housing boom and therefore the housing-lending crisis is less pronounced here than in much of the rest of the country. Connecticut companies are guardedly optimistic about business conditions in the state for the first half of 2008, but the national credit problems are starting to hit Connecticut and businesspeople are very concerned about the availability of credit later in the year. Those are among the findings of the Connecticut Business & Industry Association's (CBIA) first-quarter 2008 Economic Survey and the CBIA/TD Banknorth Credit Survey, both released today. Nearly one-third of businesses responding to the economic survey (32 percent) expect conditions for their firms to improve over the next quarter (2Q08), compared with 24 percent that expect conditions to worsen. "Despite the continued volatility in the national economy, Connecticut businesses continue to compete and meet the demands of the marketplace,” said Peter Gioia, CBIA vice president and economist. “They rated business conditions for their companies as positive, by almost two to one, indicating the economic climate in Connecticut may be strong enough to avert the effects of a looming national recession.” Nearly three-quarters of respondents (71 percent) expect the national economy to worsen over the next quarter, up from 63 percent in the fourth quarter 2007 and dramatically higher than a year ago, when only 19 percent expected a national downturn. Businesses are a bit more optimistic about Connecticut 's economy, with slightly more than half (57 percent) expecting the state economy to worsen during the first half of the year. That's up from 28 percent a year ago. Only 8 percent now expect improvement. Looking ahead, 58 percent expect slow growth over the next 12 months, while 8 percent expect rapid growth. "Having roughly two-thirds of respondents expecting growth could bode well for the state's economy, which might withstand or deflect the impact of a national downturn in the first half of 2008,” said Gioia. Many Connecticut companies foresee increases in costs as well as in productivity and workforce size.
These business expectations are important indicators of a state's economic strength, as is the ability of companies to obtain credit to secure future business investments. Results from the CBIA/TD Banknorth Credit Survey show that the national credit crunch is beginning to adversely affect credit availability in Connecticut. The CBIA/TD Banknorth Credit Availability index fell to 42 percent in the first quarter of 2008, representing a quarter-over-quarter decline of 27 percent. This is the second time during the past year that the overall index has declined, indicating that a modest deterioration in the state's credit markets is at hand. But there appears to be more concern about future credit conditions. For the first time since the survey began, the current credit conditions index fell below the crucial level of 50. (Any reading over 50 indicates a positive view of overall credit conditions, while a reading under 50 denotes deterioration.) The Total Credit Availability Index is a composite measurement of current credit availability (49) and future expectations (36).
“The health of the national and state labor markets is extremely important here,” said Donald Klepper-Smith, chief economist and director of research at DataCore Partners. “If the employment picture holds up over the near term, we should not experience a major down-draft in credit conditions, particularly given recent interest-rate cuts. But if we experience job losses of any significance, the ability of consumers and businesses to service even prime loans may be called into question, further weakening credit markets.” The credit survey was conducted by CBIA and Klepper-Smith and sponsored by TD Banknorth. The methodology used to determine the index is similar to that used by The Conference Board to calculate consumer confidence measures. The survey was e-mailed to approximately 3,000 Connecticut businesses in late February 2008. A total of 358 executives responded, for a 12 percent response rate and a margin of error of plus or minus 5 percent.
### CBIA is the state's largest business organization, with 10,000 member companies.
Editor 's Note: For a copy of the 1Q08 Economic Survey and the CBIA/TD Banknorth Credit Survey, visit www.cbia.com/newsroom/surveys. To arrange an interview with Peter Gioia, CBIA economist, or for more information, please contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com. 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
|
 |
© Copyright 2003 Connecticut Business & Industry Association, cbia.com. All rights reserved. |
 |
