2012 Survey of Northwest Connecticut Businesses


The Northwest Connecticut Chamber of Commerce and the Connecticut Business & Industry Association (CBIA) are pleased to collaborate on the third biennial survey of businesses in northwestern Connecticut.

2012nwctCompanies of all types and sizes were asked about their highest business priorities, biggest challenges, and long-term plans; their economic outlook; regional strengths; and concerns about the state’s fiscal situation, tax policies, and regulatory burdens.

They also were asked to identify resources they use to recruit workers and market themselves, impacts they believe federal healthcare reform will have on their business, and best bets for spurring economic growth in the region and statewide.

Questionnaires were emailed in September 2012 to 1,100 businesses throughout northwestern Connecticut; responses were collected from 370 of them.

This report details the findings.

2012 Key Findings

  • While 34% of respondents say maintaining and growing the manufacturing base should be the top economic priority for northwestern Connecticut, 25% believe regional collaboration (e.g., among economic development groups, banks, accounting firms, utilities, and chambers of commerce) to attract business investment is key.
  • 72% of firms give the region’s economic climate a below-average rating. Only 6% rate the climate as good (compared with 9% two years ago, and 28% in 2008).


  • More than half of all respondents (56%) expect conditions to stay the same over the next 12 months.
  • Investments in towns/cities and education, along with incentives for businesses to create jobs, are widely viewed as the most helpful actions to spur economic growth in the region.
  • 2014 largely is seen as the greatest period of national, state, and regional economic recovery in terms of jobs, housing prices, and consumer confidence—although a considerable number of respondents believe conditions will not improve to any meaningful extent until 2016 or beyond.
  • The majority of businesses (62%) say the cost of doing business is a major challenge to employers in northwestern Connecticut, and 38% characterize the region’s lending climate as below average.
  • 2012nwct2More than one-quarter of respondents (27%) say current credit conditions negatively impacted their ability to do business. Of those, 63% were unable to grow or expand, 43% reduced their marketing budgets, 29% trimmed employee compensation or benefits,
    and 24% reduced their workforce.
  • Healthcare costs specifically are considered a “significant burden” by nearly two-thirds (66%) of businesses. Government regulation (48%) and state taxes (45%) also are significantly burdensome.
  • Though costs associated with technology are not seen as problematic by most businesses (only 9% said they were a significant burden), nearly half of all respondents (48%) admit that keeping up with technology to promote their business is a challenge, and 45% say quality broadband is an issue.
  • 90% of businesses are concerned or extremely concerned about Connecticut’s budget deficit, and 65% say the deficit affected their long-term business decisions.

Top Priorities, Challenges

When asked about the single greatest challenge to operating a business in northwestern Connecticut, businesses cited the following:

  • weak economy (34%)
  • taxes (21%)
  • state mandates and regulatory burden (19%)
  • healthcare costs (9%)
  • energy costs (5%)

2012nwct3Many businesses were unable to choose a single answer but cited a combination of factors or “all of the above.”

Still others, in open-ended responses, blamed demographic trends—specifically, an aging population and a dearth of young, skilled workers.

When asked how burdensome certain cost factors are for their business, respondents said the following posed a “significant burden:”

  • healthcare (66%)
  • government regulation (48%)
  • state taxes (45%)
  • energy (35%)
  • local property taxes (29%)
  • labor (17%)
  • marketing (13%)
  • technology (9%)

In addition to ramping up manufacturing (cited by 34% of respondents) and regional collaboration to attract business investment (25%), top economic priorities for northwestern Connecticut include strengthening entrepreneurship (10%) and improving education and municipalities to make the area more attractive for families (10%).


Nine out of 10 respondents are concerned or extremely concerned about the state’s fiscal situation and budget deficit.

Two-thirds say the deficit impacted their long-term business decisions.

2012nwct4In a question on what factors will have the biggest influence on business operations and decisions over the next 12 months, national economic uncertainties (44%) came in first.

The state’s fiscal condition came in second (24%), followed by the price of energy* and commodities, lack of skilled labor, and tight credit conditions.

The greatest period of economic recovery for the region in terms of jobs, housing, and consumer confidence is largely predicted to occur in 2014.

The next biggest cluster of respondents thinks it will be delayed to 2016 or beyond. Fewer than 15% of respondents expect this type of recovery for the region, state, or U.S. in 2013, and virtually no one expects it in 2012.

Though businesses by and large believe economic conditions will remain stable over the next year, 28% anticipate some improvement, while 15% expect conditions to deteriorate.

Forty percent of respondents expect their revenues to increase in 2013, and 33% foresee an increase in their pretax profits. On the other hand, decreases in revenue and pretax profits are projected by 18% and 32% of companies, respectively.

Most businesses anticipate no change in the size of their workforce; however, 22% plan to add employees, and 11% expect to lose some.


Credit conditions posed a challenge for a number of the region’s businesses.

More than2012nwct5 one in four companies surveyed (27%) say current credit conditions negatively impact their ability to do business, restricting their ability to grow or increase inventory, delaying their purchase of capital equipment, and forcing cutbacks in their marketing budgets, employee compensation and benefits, and workforce.

Many companies report that business has suffered because their clients are unable to secure loans.

While 42% of respondents describe today’s lending climate as average, 38% say it’s below average (fair or poor). Only 20% characterize it as above average (18% say it’s good; 2% say it’s excellent).

Taxes, Regulatory Burden

In an open-ended question on which federal and state regulations most adversely impact their business, respondents’ answers clustered in six main areas.

Taxes—including state sales tax, payroll, unemployment, personal property, and real estate taxes—are an overriding concern, accounting for 40% of responses.* (Tax laws were characterized as “costly,” “confusing,” and “difficult to administer.”)

Other common responses:

  • mandated state healthcare provisions and the new federal healthcare law (13% of responses)
  • labor laws (12%)
  • financial services regulations, including Dodd-Frank (11%)
  • environmental regulations (7%)
  • OSHA regulations (3%)

Workforce Issues

In terms of hiring new employees over the last 12 months, businesses in northwestern Connecticut were nearly evenly divided: 52% hired; 48% did not.

The next 12 months look bleaker: only 38% plan to hire; 62% do not.

Of those hiring, nearly half (46%) say they have had difficulty filling positions.

2012nwct6In shortest supply are skilled manufacturing workers, including CNC machinists, assemblers, welders, and toolmakers. (To add to the problem, more than half of all businesses surveyed believe the public has a negative view of manufacturing jobs. Only 26% believe there is not a negative perception, and 23% are unsure.)

Also in demand throughout northwestern Connecticut are workers to fill positions in healthcare, management, sales, housekeeping, and retail.

Technology/computer, math/science, healthcare, basic employability, and manufacturing-specific skills are all seen as key capabilities for employees over the next few years.

The quality of the region’s workforce is largely seen as average (34%) or good (29%). Twenty-six percent of businesses describe workforce quality in the area as slightly lower than average (26%). Only about 6% of respondents see it as poor; by the same token, only 5% call it excellent.

When asked how much training new hires need (on a scale of 1-5, with 5 being “extensive training”), most respondents put the level of training at 4 (33%) or 5 (24%).

2012nwct7The number and availability of workers in the region presents an even greater problem. Nearly 40% of businesses say the availability of workers is poor or fair, and 36% consider it average.

One in six companies surveyed say a lack of affordable housing hurts their ability to attract and retain employees. A shortage of young workers due to the area’s limited social/recreational opportunities also is seen as an obstacle in attracting employees (cited by 25% of respondents).

More than half of the businesses we surveyed (56%) said Connecticut’s aging population is a somewhat or very significant concern in terms of their ability to maintain an adequate workforce.

One in 10 say that language barriers are a problem for many of their workers. Transportation is an issue among 28% of employers surveyed.


Companies are divided on healthcare policy. While 62% do not support the federal Patient Protection and Affordable Care Act (“Obamacare”), 38% do.

They are split on healthcare coverage as well: 62% provide employee health insurance, while 38% do not.

Strategies believed to have the greatest potential for reducing healthcare costs are tort reform to reduce malpractice costs, a reduction in the number of state-mandated health insurance benefits, and a greater
focus on prevention and wellness.

Social Media, Marketing

Nearly two-thirds of respondents (65%) use social networking platforms such as LinkedIn, Facebook, and Twitter, but fewer than half (48%) use them to market their products or services.

In 2009, when we first began tracking Connecticut businesses’ use of social media technology, only 22% believed that LinkedIn, Facebook, or Twitter held any potential business benefit.

A year earlier, only 29% considered the Internet a viable strategy for growing their business. Today, 80% of northwestern Connecticut businesses use the Internet as a marketing tool.

Print ads (55% of respondents) and direct mail (41%) are deployed less frequently.

Regional resources used to market products and services include the Northwest Connecticut Chamber of Commerce and the Northwest Connecticut Arts Council.

The most widely used marketing vehicle for northwestern Connecticut businesses—cited by 82% of respondents—is word of mouth.


When we last conducted this survey, in 2010, businesses in northwestern Connecticut predicted that a regional, statewide, and national economic recovery would begin in earnest around 2012.

Clearly, it is taking longer than expected for the economy to rebound.

Nearly three-quarters of the businesses we surveyed characterize economic conditions in the region as below average, and six out of 10 expect those conditions to persist at least another year. Respondents generally see 2014 as the year of solid recovery and growth.

To achieve growth and create jobs, they believe northwestern Connecticut must strengthen regional collaboration, maintain and grow the area’s manufacturing base, and invest in improvements to towns, cities, and education. In addition, credit needs to be more readily available so that businesses can expand to their potential.

Policymakers have an opportunity to help in the next General Assembly session by getting the government’s fiscal house in order and addressing high business costs, including the cost of healthcare.

The 2012 Survey of Northwest Connecticut Businesses was sponsored by Alcoa Inc., BD, Litchfield Bancorp, Northwest Utilities Companies, Northwest Community Bank, and Webster Bank.

The survey was emailed to top executives at approximately 1,100 businesses throughout northwestern Connecticut in mid-September 2012. CBIA received 370 responses, for a return rate of 33.6% and a margin of error of +/-5.2%.

* This survey was in the field just prior to Gov. Malloy’s announcement in October of Connecticut’s new Comprehensive Energy Strategy, a blueprint for cheaper, cleaner, more reliable energy in the state.

*In a separate question on taxes, the personal income tax was most worrisome for the greatest share of respondents (28%)—more than local property taxes (19%) or corporate taxes (18%). That is likely because a large number of companies surveyed are S-corporations, LLCs, and other pass-through entities—meaning that they pay their business taxes through the personal income tax.


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