Optimism grew among Connecticut businesses in the fourth quarter of 2016 according to a new survey released March 2.
The 2016 CBIA/Farmington Bank 4th Quarter Economic and Credit Availability Survey found 40% of business leaders expect improved conditions for their firms, up from 26% the previous quarter.
Thirty-nine percent expect stable conditions (compared with 49% in the third quarter) and 21% had a negative outlook, down from 24%.
Almost a quarter (24%) said they expect to increase their workforce, up from 19%, while 65% forecast no change (59%) and 11% plan reductions (23%).
“It's heartening to see the jump upwards in those expecting better conditions for the economy, their own company, and hiring,” says CBIA economist Pete Gioia.
A representative sample of Connecticut businesses were surveyed via email between mid-January and early February following the state and presidential elections.
Businesses were also asked to speculate about the impact of the Trump administration’s economic, regulatory, and fiscal policies on Connecticut's economy.
Fifty-nine percent forecasted a positive impact on growth, 6% saw no impact, 10% a negative impact, and 25% were uncertain.
DataCore Partners economist Don Klepper-Smith said Connecticut's sluggish post-recession job growth continues to be a concern, with the state losing 2,000 jobs in 2016 based on preliminary reports.
The U.S. economy is poised for 2%-2.5% growth in 2017, although the risk of policy error is growing.
“The outlook for 2017 is clouded with uncertainty, but will be a function of proposed tax cuts, emerging trade policies, proposed spending on national infrastructure, and proposed rollbacks on federal government regulations, which hopefully will seek to spur new business investments,” he said.
The Farmington Bank Credit Availability Index is a diffusion index that speaks to the health of Connecticut’s credit markets.
This quarter, the FBCAI was 47.2, down from last quarter (54.7).
“Credit availability remains a strong lead by plentiful bank credit, which is used by most firms using credit,” said Farmington Bank CEO and president John Patrick.
The survey also found:
- 29% of respondents used financing in the last three months (38% in the third quarter)
- 86% of those used bank loans and lines of credit to meet credit needs (78%)
- 90% were able to satisfy their borrowing needs (79%)
- 76% consider Connecticut’s lending climate to be average, good, or excellent (79%)
- 56% expect the lending climate to remain stable over the next three months (43%), 24% say it will be fair or poor (28%), and 19% believe it will be good or excellent (29%)
The 2016 CBIA/Farmington Bank 4th Quarter Economic and Credit Availability Survey had 173 total responses for a 7.5% response rate, with a margin of error of +/- 7.5%.