Government Spending, Obamacare, Tax and Regulatory Burdens Top Issues
While Connecticut's economy showed signs of growth in recent quarters, employers remain concerned about the state's business climate and overall economic outlook according to a survey released today.
The 2013 Survey of Connecticut Businesses, published by the Connecticut Business & Industry Association and the accounting, tax, and consulting firm BlumShapiro, identifies issues and trends within the state's economic, fiscal, and regulatory climates.
The survey revealed modest improvement in private sector job creation, with 43% of companies having hired or planning to hire new employees in 2013 and 47% saying they will add jobs in 2014.
For manufacturers, those numbers jump to 48% in 2013 and 56% in 2014. Two-thirds of those companies adding jobs did report problems finding qualified workers to fill positions.
Employers cited state and national economic weakness, the state's business climate, and labor costs associated with government mandates as ongoing barriers to private sector job creation efforts.
"Connecticut is fortunate to have a wide array of businesses that can be competitive," said CBIA president and CEO John R. Rathgeber. "Many states recognize this and are recruiting Connecticut companies to make investments in their locales.
"We must redouble our efforts to make our state the best place for businesses to grow and create good jobs. If we fail to do that, our future will not be as bright as it should be for future generations."
Connecticut's economy was the single greatest concern for 34% of businesses, followed by national economic uncertainty (21%), tax burden (14%), Obamacare (11%), and regulatory compliance costs (9%).
Looking ahead to 2014, when federal healthcare reform requirements take effect, the percentage of businesses that ranked implementation as their top concern doubled to 22%, second only to state economic issues (26%).
About half of those surveyed viewed conditions for their companies as below average, while 28% ranked them as average, and 24% said conditions were above average.
Just 11% felt the state was a positive place to do business, reflecting concerns over the pace of the state's economic recovery and Connecticut's ability to compete on a regional, national, and global basis.
"There are fundamental reasons Connecticut lags the nation in recovery and these latest survey results underscore some of those key issues," said Don Klepper-Smith, chief economist at DataCore Partners.
"There is an indisputable link between business vitality and state fiscal policy, which impacts our long-term economic competitiveness."
Quality of life continues to be one of the state's greatest business assets, cited by 54% of respondents, with proximity to customers and major markets nominated by 41%.
Exporting also continues to be an area of strength, with 79% of manufacturers and 32% of the state's businesses overall engaged in international trade.
More than half (56%) of surveyed businesses expected to record a profit this year, down three percentage points from 2012. Twenty-eight percent expect to break even in 2013, a 10-point jump from last year.
"Despite the challenges businesses have identified with our economy this year, Connecticut companies continue to invest in their employees and infrastructure," said Thomas DeVitto, BlumShapiro's chief marketing officer.
"It's imperative that we create the proper business climate in order for these companies to thrive and profit in Connecticut."
The survey, released today at The Connecticut Economy conference in Rocky Hill, was emailed to 5,112 businesses in late June and July 2013, with a 7.4% response rate and a margin of error of +/- 5.2%. Click here to download or send an email to request a print copy.
BlumShapiro is the largest regional accounting, tax, and business consulting firm based in New England, with offices in West Hartford, Shelton, Boston, and Rockland, MA.