Businesses Report Improvement in Conditions, Hiring Remains Stagnant

Connecticut businesses are reporting a mixed outlook for their firms, according to a survey released today by the state’s largest business organization.
CBIA’s 2017 Third Quarter Economic and Credit Availability Survey shows significant increases in both the number of firms reporting an improved outlook and worsening conditions.
Thirty-seven percent of survey respondents see improved conditions for their firm, up from 29% in the second quarter.
However, 24% predict worsening conditions, a 10-point jump from the last quarterly survey. Forty percent forecast stable conditions, down from 57%.
“We found that several respondent groups are outperforming the norm on growth for their firms over the next three months,” CBIA economist Pete Gioia said.

Manufacturing Outlook Positive

Gioia noted that manufacturers were particularly bullish, with 43% reporting an optimistic outlook against just 20% with a pessimistic forecast.
“This coincides with what we’re hearing from manufacturers across the state–overall, they are doing really well,” Gioia said.
“They just need to find skilled talent to replace retiring workers.”
Overall, hiring remains sluggish with 21% of companies expecting to grow their workforce, down from 23% in the previous quarter.
The percentage of firms expecting to shrink their workforce increased five points to 17% in the third quarter, while 63% see no change, down three points.
“The survey finds steady, but modest growth for Connecticut businesses,” Gioa said.
The survey also shows companies are increasing their exporting activities.
Thirteen percent indicated exports make up 6-15% of their firm’s sales, up from 9% last quarter. The majority (57%) reported no exporting activities, down from 65% last quarter.

Credit Readily Available

Credit availability is not a problem for 88% of survey respondents.
“Credit availability remains excellent and is expected to slightly improve over the next three months,” Gioia said.
“We see more firms access credit and 94% are meeting all or most of their credit needs. These are good signs for expansion.”
When it comes to financing, bank credit remains the top choice (45%), followed by vendor credit (9%), credit cards (9%), and business earnings (9%).
Working capital (26%) and capital for machinery and equipment (18%) are the top needs.

Little Impact from Storms, Sanctions

Businesses were asked if their firms would be impacted if sanctions were extended to countries that trade with North Korea.
Although 45% of the respondents conduct international trade, only 6% report that sanctions could impact their business.
Businesses were also asked if the three recent major hurricanes, Harvey, Irma, and Maria, had any impact on their business.
More than half (58%) reported no impact, and the remaining cited impacts on customers (24%), supply chain (13%), fuel costs (8%), and other (6%).
CBIA’s 2017 Third Quarter Economic and Credit Availability Survey was emailed to businesses in mid-October and early November, with a 12.1% response rate and a margin of error of +/- 9%.

CBIA is Connecticut’s largest business organization, with thousands of member companies, small and large, representing a diverse range of industries from every part of the state. For more information, please email or call Meaghan MacDonald (860.244.1957).