The percentage of profitable Hartford-New Haven-Springfield businesses reached a post-recession high in 2016, with a mixed outlook for future growth prospects, according to a new survey released today.
The 2017 Hartford-New Haven-Springfield Business Survey found 64% of companies reported net profits, with 69% expecting a profitable 2018.
Twenty-six percent of companies broke even in 2017 and 25% forecast holding steady in 2018. Ten percent reported losses, with only 6% predicting that for 2018.
The survey, conducted every two years by CBIA and New England's Knowledge Corridor, surveys regional companies about their priorities and challenges, including workforce development, transportation, international trade, and business costs.
Comprising Hartford, Tolland, New Haven, and Middlesex counties in Connecticut, and Franklin, Hampden, and Hampshire counties in Massachusetts, the region's combined gross domestic product exceeded $161 billion in 2016.
Less than a third (29%) of surveyed businesses believe the region's economy will improve next year, with 38% forecasting stability and a third (33%) expecting worsening conditions.
Businesses are split about the regional outlook for the next five years. Forty-six percent are optimistic about the region's economy over that period, 44% are pessimistic, and 10% have no opinion.
The survey found that significant growth challenges exist for businesses in the I-91 corridor.
High taxes were the main barrier to growth (28%), down slightly from the 2015 survey (31%).
Other challenges reported include a weak economy (24%); shortage of labor (21%); regulatory climate (9%); infrastructure issues (7%); cost of energy (3%); and real estate availability (2%).
"The survey results will help us understand how we can build and sustain economic viability in the Hartford-Springfield region," said Dennis Duquette, MassMutual’s Head of Community Responsibility and President of the MassMutual Foundation.
Transportation also remains a concern for regional businesses.
Two-thirds (66%) of the I-91 corridor's business leaders say traffic congestion and poor and deteriorating infrastructure are the most pressing transportation issues.
Just over three-quarters (77%) say they use Bradley International Airport, compared with the 40% who fly out of out of New York City airports, and the 36% who use Boston Logan International Airport.
Twenty-two percent of those surveyed said they or their employees will use the new Hartford Line commuter rail between New Haven and Springfield once it begins service next year, while 53% will not use it, and 25% were uncertain.
An overwhelming 90% of business leaders say expanding commuter rail service between Boston and Springfield will benefit their business, while 91% believe it will positively impact the region's economy.
"For the Knowledge Corridor to remain competitive, it must continually strive to expand its transportation connections and choices," said Tim Brennan, executive director of the Pioneer Valley Planning Commission.
When it comes to finding talent, 34% of companies surveyed experience difficulties both finding and retaining young workers, 20% have trouble just finding them, while retention alone is an issue for just 9%.
The top three challenges for finding younger workers are lack of skills or education (45%), competition from other area companies offering higher wages and/or better benefits (18%), and the overall cost of living in the region (14%).
"Leveraging the region’s strengths requires concerted, coordinated efforts from the private sector to drive greater recognition among lawmakers about the area's challenges and secure their commitment to maximize economic vitality," said CBIA economist Pete Gioia.
The 2017 Hartford-New Haven-Springfield Business Survey was mailed and emailed in August 2017 to business leaders in Hartford, Tolland, Middlesex, and New Haven counties in Connecticut, and Franklin, Hampden, and Hampshire counties in Massachusetts.
There were 440 responses, for a margin of error of +/–1.7%. (All figures are rounded to the nearest whole number and may not total exactly 100%).
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).