Northwest Story: Higher Sales, Higher Costs
Nearly 60% of businesses in northwest Connecticut project an increase in total sales revenue in 2015, according to a new survey.
When it comes to the bottom line, however, the numbers tell a slightly different story. In spite of higher earnings from sales, fewer than half of all businesses surveyed (46%) anticipate more in pre-tax profits next year.
And while half the area’s employers will be hiring over that same period, most will not actually be growing their workforce.
The 2014 Survey of Northwest Connecticut Businesses, conducted by the Connecticut Business & Industry Association and the Chamber of Commerce of Northwest Connecticut, paints a picture of a regional economy that is recovering but also constrained by rising costs and workforce challenges.
Pros and Cons
Businesses are fairly evenly divided on the greatest advantage to doing business in northwest Connecticut, identifying the region’s proximity to New York, Boston, and Springfield markets and amenities (22%); local environment (17%); supportive chamber of commerce (14%); active local banks (11%); and arts, culture, and entertainment opportunities (10%).
Cost of living (cited by 43% of executives surveyed) is the single greatest disadvantage, and the surest way to spur the region’s economic growth—according to one-third of the businesses surveyed—is to reduce personal and business taxes.
When asked to speculate on the number-one reason workers leave the region, 52% of businesses identified taxes/cost of living.
Top economic priorities are, in order, growing the local manufacturing base, regional collaboration to attract business investment, and retaining a skilled workforce.
Two-thirds of northwest Connecticut businesses (67%) surveyed are somewhat or very concerned about the area’s aging population, in terms of maintaining an adequate workforce. That’s up 11 percentage points from 2012, when this survey was last conducted.
“These findings reinforce how concerned business leaders are about their aging workforce,” said Pete Gioia, CBIA vice president and economist. “Ensuring that Connecticut schools and training programs can produce enough skilled, top-quality young workers to meet the needs of companies trying to replace retiring workers or expand their operations is critical.”
Business leaders predicted the skills most in demand will be industry-specific in medical, utilities, manufacturing, and construction fields (37%) and computer/IT skills (28%).
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