Where’s the Growth?
How is Connecticut’s economy performing? Steady and S-L-O-W, say business owners and executives, responding to CBIA’s latest quarterly economic survey.
The First Quarter 2012 Economic Survey found that area executives believe the economy and their own firms have maintained gains seen in the fourth quarter of 2011.
“While we still have a long way to go in growing the economy, the last two surveys show optimism and growth expectations on par with slow but steady economic recovery,” says CBIA economist Peter Gioia.
The survey found that 41 percent of respondents see their own firm improving over the next three months, while 12% predicted worsening. In the last survey, 46 percent saw the potential for improvement, while 14 percent took a pessimistic outlook.
On production and sales, the most important determinant of future company performance, 46 percent of respondents anticipate future increases, compared to 16 percent who expect decreases in the second quarter of 2012—findings nearly identical to the results of the fourth quarter survey.
Jobs should see a slight improvement in the state, as 24 percent of business leaders who responded to the survey expect to add workers and only 10 percent expect to decrease workers over the next quarter.
As recently as the third quarter 2011 survey only 16 percent of respondents said they would add staff, compared to 22 percent who said they would cut staff. Although these numbers are likely to support only slow growth, they represent statistically significant changes.
The survey saw executives expecting more growth nationally than locally. Nationally, 34 percent of respondents expected the U.S. economy to improve, while 24 percent expected further decline.
The survey found that business leaders’ confidence in the state remains fairly consistent with fourth quarter 2011 survey results, with 21 percent of respondents seeing the state economy improving and 35 percent expecting continued deterioration.
Productivity gains are solid but will be tempered by expected added costs. Almost half of those surveyed (47 percent ) forecast future gains in productivity, but 43 percent see increased wage costs, and 43 percent see total compensation costs going up.
“When you look at the results of the first quarter 2012 survey in comparison to the fourth quarter 2011 results, it’s clear that we haven’t gained much ground, but we haven’t lost any either,” Gioia says.
“But it’s important to note that we are showing modest gains over the surveys prior to the fourth quarter of 2011.”
The survey was conducted in April 2012 with 246 respondents from around the state across many industries. The margin of error is +/- 6.38 percent with a 12.5 percent response rate.
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