More Connecticut businesses expect to increase their workforce, yet finding skilled workers remains a challenge according to a new survey released today.

CBIA's 2017 Fourth Quarter Economic and Credit Availability Survey found 28% of companies expect to add employees, up from 21% in the previous quarter.

Fourth Quarter 2017 Economic Survey: hiring outlook
The percentage of businesses expecting to add workers jumped seven points in the fourth quarter.

More than half (54%) of surveyed companies say their workforce will remain stable—compared with 63% in the third quarter—while 17% expect to downsize, unchanged from the last quarter.

CBIA economist Pete Gioia said the manufacturing sector was particularly bullish, representing 62% of those companies expecting to add employees.

"That ties in with what we saw in the third quarter GDP numbers and the preliminary jobs report from last year, which showed manufacturing driving economic and job growth," Gioia said.

Manufacturers added 4,100 jobs in 2017 based on state Department of Labor preliminary numbers. That's more than half the 7,700 total jobs gained last year.

And manufacturing and finance and insurance were the key sectors as the state's economy expanded 3.9% in the third quarter of 2017.

Overall Outlook Stable

Gioia said nearly two-thirds of survey respondents hired at least one new employee in the three months prior to completing the survey.

"However, while two-thirds hired someone in the past three months and 60% plan to hire someone in the next three months, 48% of those trying to hire couldn't fill all their open positions," he said.

"Companies want to hire more. While we heard again about unfilled manufacturing jobs, we also heard up to 80 different job titles that were yet to be filled.

Fourth Quarter 2017 Economic Survey: Company outlook
The number of companies reporting an improved outlook was basically unchanged in the fourth quarter.

"This only further highlights the need for increased workforce development efforts to help fill vacant jobs around the state."

The survey also found that 38% of businesses have an improved outlook for their firms, up one percentage point from the previous quarter.

The number of businesses with a stable outlook rose six points to 46%, with 16% expecting a downturn, down from 24% in the third quarter.

"Manufacturers represent over half of those reporting either an improved or stable outlook," Gioia noted.

Credit Availability

The survey shows commercial credit availability remains strong in Connecticut.

Eighty-eight percent say credit availability is not a problem for their firms and only 4% were unable to satisfy their financing needs.

Respondents still need credit for a wide range of needs, from credit lines to fund operations to expansion of facilities, equipment, and new product development.

Most respondents (86%) classify the current lending climate as average, good, or excellent while the same expect it to stay that way over the next three months.

"Credit is the lifeblood of small businesses," Gioia said.

"And confidence in credit availability signals businesses will seek to use it when the time comes to grow and invest."

CBIA's 2017 Fourth Quarter Economic and Credit Availability Survey was emailed to businesses in January 2018 with an 8.3% response rate and a +/-9% margin of error.