Survey: Rising Costs, Workforce, Uncertainty Temper Growth Expectations

Rising costs, workforce challenges, and uncertainty are tempering Connecticut’s economic outlook, according to a new survey released today.

The 2025 Survey of Connecticut Businesses, produced by CBIA and the accounting and business advisory firm CBIZ, Inc., found that costs are rising for more than 90% of firms.

Released at the annual The Connecticut Economy conference in Hartford, the survey shows that 76% of employers report challenges with finding and retaining workers.

Survey respondents also report that addressing Connecticut’s high cost of living and expanding childcare access are critical for workforce development.

Key Findings 

• More than nine in 10 businesses say the cost of doing business is rising, driven by labor, healthcare, energy, taxes, and compliance costs 
• 76% of employers report difficulty hiring and retaining workers, with skills gaps and wage expectations as top barriers 
• 59% say access to affordable, quality childcare is important for attracting and retaining employees 
• Only 12% believe the state’s business climate is improving, while 47% say it’s static, and 40% believe it’s declining  
• Two-thirds of businesses turned a profit in 2024, 18% broke even, and 15% reported losses—seven points higher than forecasted  
• Employee recruitment and retention remain the leading investment priority, cited by 34% of employers
• 31% plan to expand their workforce in the next six months, while 9% expect a slight decline 
• 36% are using artificial intelligence in their operations, while 73% of non-users are unclear how to adopt the technology  
• 20% feel healthcare costs and accessibility should be the General Assembly’s top priority in 2026 

CBIA president and CEO Chris DiPentima said the survey shows “companies are focused on innovation and optimization as they navigate complex state, federal, and global challenges.”

“Employers are increasingly dealing with unnecessary uncertainty generated by both federal and state policy decisions, particularly tariffs and the pivot by Connecticut policymakers away from the fiscal guardrails and no-tax policies that brought much-needed economic stability in recent years,” he said.

“While our survey shows some signs of optimism, concerns about the state’s competitiveness, workforce challenges, and cost pressures continue to temper expectations.”

Growth Strategies

CBIZ managing director Michael Brooder, who reviewed the survey results with a panel of business leaders at today’s conference, said that despite economic headwinds, “employers are investing in talent and innovation in Connecticut as two key strategies for growth.”

“Companies are expanding internship and apprenticeship programs, partnering with schools, and introducing emerging technologies to remain competitive,” he noted.

DiPentima said that while Connecticut’s labor participation rate remains high—14^th best in the country at 64.7%—the labor shortage remains a significant economic growth challenge.

As of July 2025, the state had 77,000 unfilled job openings—22,900 (8.6%) more than before the pandemic hit in March 2020.

“The findings in this survey underscore an urgent need for targeted, business-informed policy solutions,” DiPentima said.

“For Connecticut to realize its economic potential, the state must address its high costs with policies that convert its strengths into sustained economic momentum.”

CBIA emailed the 2025 Survey of Connecticut Businesses to more than 2,800 top executives throughout the state from June 3 to July 17.

Most of the firms surveyed are small businesses, with 68% employing less than 50 people, 13% with 50 to 99 people, 11% between 100 and 249 employees, and 8% employing between 250 and 499 people.

The survey’s response rate was 13% with a margin of error of +/-5%.