Survey: Business Resiliency Tested by Rising Costs, Acute Labor Shortage

Connecticut businesses remained resilient over the past year despite the state’s acute labor shortage and rising costs, according to a new survey released today.

The 2024 Survey of Connecticut Businesses, produced by CBIA and the accounting and business advisory firm Marcum LLP, found that 78% of employers experienced difficulty finding and retaining workers.

Released at the annual The Connecticut Economy conference in Hartford, the survey shows that one-third of business leaders believe the state’s high cost of living is the main factor hampering growth, with 21% citing the lack of skilled job applicants.

Survey respondents also report that operating costs continue to increase—in what already is one of the most expensive states in the country to run a business—and state government mandates and regulations remain significant hurdles.

Key findings:

• Almost nine in 10 surveyed firms say the cost of doing business is increasing, citing labor costs, goods and supplies, and state taxes
• 78% report difficulty finding and retaining workers and 46% list employee recruitment and retention as their top investment priority
• 60% say the availability of affordable, quality childcare is important for recruiting and retaining talent
• Only 8% of executives believe the state’s business climate is improving, 41% say it’s static, and 39% say it’s declining
• 73% of businesses reported profits in 2023, down three points from 2022, with 13% breaking even and 14% posting losses
• 28% expect to grow their workforce in the next six months and 8% expect a decline

CBIA president and CEO Chris DiPentima said the survey shows that “the opportunities for Connecticut’s economy are limitless—what’s needed is the commitment to realize them.”

“Businesses are navigating challenging times through innovation and supporting one of the most productive workforces in the world through increased wages and evolving workplaces,” he said.

“There’s significant demand for Connecticut products and services, and while job growth remains strong, the pace of that growth is not fully meeting the demands of our economy.   

“We are promoting solutions to lower costs, reduce regulatory burdens, and expand the labor force, and it’s critical that policymakers embrace them to accelerate job growth and create more opportunities for our residents.”

DiPentima noted that Connecticut has 93,000 job openings, 33% more than pre-pandemic levels, while the labor force has declined by 23,300 people (-1.2%) since February 2020.

“We have the jobs—what we need are the people to fill those jobs,” he said.

Marcum’s Hartford office managing partner Michael Brooder, who reviewed the survey results with a panel of business leaders at today’s conference, said businesses “continue to demonstrate their resilience.”

“Connecticut businesses are overcoming cost and workforce challenges and positioning for future growth,” he said.

“Sustaining that growth requires policies that lower costs for employers and employees and expand talent pipelines.”

CBIA mailed and emailed the 2024 Survey of Connecticut Businesses to more than 2,800 top executives throughout the state from June 11 to July 18.

The majority (89%) of surveyed firms are small businesses, with less than 100 employees. Eight percent employ 100 to 249 people, 2% have 250-499 employees, and another 2% have more than 500 employees. 

The survey’s response rate was 14%, with a margin of error of 2%.

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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 contact Scott Beaulieu (860.244.1929).