Controlling state government spending and reforming Connecticut's employee retirement system should be the top priority for Governor-elect Ned Lamont and the General Assembly according to a new survey released today.
The 2018 Survey of Northwest Connecticut Businesses, produced by CBIA and the Northwest Connecticut Chamber of Commerce, identifies a number of critical priorities for the new administration and legislature.
Thirty-nine percent of surveyed business leaders called for spending and pension reforms, 25% cited balancing the budget and fiscal stability, while 16% said improving the state's economy and business climate should be the main focus.
"The survey provides valuable data which will assist in developing key focus areas for our state and our region," said Torrington Savings Bank president and CEO John Janco.
"Connecticut's future economic growth is contingent on lowering business costs, which will help promote growth and incent our young workforce to stay in our region."
Echo Statewide Concerns
Many of the concerns shared by Northwest business leaders are also reflected in other recent surveys, including CBIA's 2018 Survey of Connecticut Businesses, which was released in September.
This year's survey reveals real long-term trends in factors hampering Northwest Connecticut's economic growth.
Some are driven by poor state fiscal policy, while others show a lack of comprehensive planning and efforts to tackle key issues like workforce development.
Improving confidence—that is, developing a climate that will attract much-needed investment—and lowering business costs are the keys for driving economic growth in both the region and the state.
"Do anything to reduce the cost of doing business in Connecticut," responded one Northwest Connecticut business leader.
"Reduce the burden state and local governments place on businesses," said another. "Overregulation and government inefficiency is at least 75% of the problem."
Twenty-eight percent of Northwest business leaders say the region's location—the proximity to New York, Boston, and Springfield—is its greatest strength.
Others cited the region's environment (26%), north-south highways (10%), active local banks (7%), and supportive chambers of commerce (6%).
Workforce issues are the region's greatest weakness, with 35% citing an inability to retain young workers and 31% identifying the challenges posed by an aging workforce.
Reduce the burden state and local governments place on businesses. Overregulation and government inefficiency is at least 75% of the problem.
The survey found that improving the region's manufacturing base—identified by 32% of respondents—and retaining young workers (21%) are the top economic priorities for regional businesses.
Forty percent of area businesses say their biggest workforce problem is finding suitable applicants for open positions, noting the state's high cost of living or competition from other employers, particularly with wages and benefits.
Retirements are a looming concern. While just 3% of the regional workforce is expected to retire this year and another 3% next year, over the next five years, firms expect 11% of workers on average to retire—a sobering statistic considering recruitment challenges.
Three quarters of respondents are taking action to attract and retain young workers.
Key initiatives include adding employee engagement and recognition programs (28%), providing flexible work schedules (25%), giving tuition reimbursement (18%), and adding flexible time-off policies (17%).
Given the region's ongoing workforce development challenges, it was not surprising that most are directing their investment dollars into employee training (17%) or recruiting skilled workers (9%).
Growth, Revenue Outlook
Less than one-third (29%) of businesses report growth in their workforce, up four percentage points from the 2016 survey.
The percentage of companies with unchanged employment levels remains at 63%, while 8% report declining employment, down from 12% two years ago.
Forty-five percent of Northwest Connecticut businesses report overall growth, up four percentage points from the 2016 survey.
The number of businesses who say they are holding steady fell 12 points from 2016 to 42%, while 13% report declining growth, up eight points from the last survey.
Two-thirds of companies (66%) expect to turn a profit in 2018, up three points from 2016. The percentage of businesses expecting a loss this year fell 14 points from the last survey to 11%, while 23% expect to break even, up 11 points.
The survey makes a number of recommendations, including greater business engagement with the region's legislative delegation and broader collaboration to address the Northwest's growing workforce challenges.