Survey Finds Business Confidence, Growth Prospects Muted
Connecticut businesses have mixed feelings about the state’s economic prospects, with few willing to take risks to grow, according to CBIA’s first-quarter economic survey.
Some 37 percent of survey respondents said conditions will improve in their businesses, the highest number in a year.
Only 17 percent expect conditions within their own firms to worsen, the lowest number in more than a year.
And 21 percent expect improvements in the state’s economy, the highest number in a year.
However, nearly half (46 percent) believe the state’s economy will worsen. That’s up from 37 percent last quarter and 43 percent a year ago.
“The economy is clearly impacting Connecticut businesses, but many are finding ways to be productive and grow despite the uncertainty both in the state and national economies,” said CBIA economist Pete Gioia.
“Because businesses are unsure about the economy, many still are reluctant to take risks, invest in their companies, and hire new employees.”
Only a handful of businesses said they will take the risks needed to grow their businesses. Fourteen percent plan to secure funding to expand in Connecticut by the end of the year, while 18 percent plan to do so by the end of 2012.
Other survey highlights:
- Performance indicators are at their highest levels in a year, with sales, production, and productivity all increasing.
- Almost half of respondents (49 percent) report increased sales and production, the highest number in a year.
- Only 10 percent said sales and production decreased, the lowest number in more than a year.
- Forty-five percent said productivity has increased, the highest number in year.
- Only nine percent said productivity decreased, down from a year high of 16 percent in the third-quarter 2010.
- On the hiring front, 26 percent of business executives expect to increase their workforce in the next quarter, up from 21 percent last quarter and 20 percent a year ago.
- Only 12 percent expect to cut their workforce, up from 11 percent last quarter but down from 16 percent a year ago.
“While there is slight improvement on the hiring front, the survey shows that Connecticut has a long way to go to climb out of the jobs ditch dug by the recession,” said Gioia.
“Nevertheless, the improvements in the performance indicators could compel executives to expand their workforce in order to keep up with customer demand.”
CBIA conducted the survey in March and April 2011. A total of 390 businesspeople responded, for a 14 percent response rate and a margin of error of +/- 5 percent.
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