Connecticut business leaders have a dampened outlook for the national and state economies despite strong growth over the last year, according to a new survey released today.
The 2019 Survey of Connecticut Businesses, produced by CBIA and the public accounting and business advisory firm Marcum LLP, found an upswing in business growth driven by strong national and international markets.
Released today at the annual Connecticut Economy conference in Hartford, the survey shows location and quality of life remain the state's best assets while the cost of doing business and legislative decision-making are its major weaknesses.
- Forty-three percent reported sales growth in 2018, up from 36% the previous year and the highest in five years.
- Growth numbers were weaker for small businesses (those with 100 employees or less): 35% reported growth, 47% said sales were unchanged, and 19% experienced a decline.
- Seventy percent of respondents reported a net profit last year, a post-recession high. Ten percent said they broke even, down from 18% in 2017, and 17% reported losses, up from 13%.
- More than half (56%) expect the size of their workforce to remain static, with only 23% looking to add workers (compared with 39% last year).
- Employee training is the top investment priority for 29% of companies, followed by technology (16%), property/facilities (15%), and worker recruitment (14%).
- Just 11% expect the state's economy to grow next year (down seven points from last year) while 73% forecast U.S. economic growth (compared with 85% last year).
- Almost half (48%) are concerned with the negative consequences of tariffs and trade disputes.
- Paid FMLA will negatively impact 77% of businesses, while 53% say raising the minimum wage will adversely affect their operations.
- Eighty-one percent believe the state's business climate is declining, a 20-point jump from last year.
- Business confidence in the legislature fell to an all-time low, with 92% disapproving of lawmakers' handling of the economy and job creation.
This year's survey was in the field following passage of two major workplace mandates—paid family and medical leave and the $15 hourly minimum wage—and a two year budget that relied almost exclusively on tax and fee increases to close a multi-billion dollar deficit.
CBIA president and CEO Joe Brennan said the survey highlights concerns over the structural issues impacting Connecticut's economic recovery and the whiplash consequences of federal trade policy.
"While Connecticut businesses are finding ways to survive and grow, their concerns for the future are clearly apparent in this survey," he said today.
"State policymakers must acknowledge these very real concerns and focus on policies that will restore confidence, promote investment, and drive long overdue economic and job growth."
Brennan noted that small businesses were particularly frustrated with the 2019 legislative session, with the survey showing many felt unfairly targeted by the new mandates and tax changes.
Michael Brooder, the Hartford managing partner for Marcum LLP, said the survey revealed areas of opportunity for policymakers to pursue to improve the state's business climate and drive economic growth.
"It's great to see Connecticut companies continuing to grow and expand despite the unrelenting negative trends in the state's business climate," Brooder said.
"I am hopeful that companies continue to find ways to be innovative for the next generation of Connecticut workers."
The 2019 Survey of Connecticut Businesses was mailed and emailed in mid-June through late July to approximately 5,300 top executives throughout Connecticut; 356 participated in the survey, with a margin of error of +/–5%.
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 Joe Budd (860.244.1951).