Credit availability for businesses in Connecticut hit a five-year high through the first six months of the year according to the Second Quarter 2013 CBIA/Farmington Bank Credit Availability Survey.

However, demand for credit among the state’s businesses fell three percentage points from the first quarter, with just 26% of those surveyed indicating they sought financing in the April-June timeframe.

“That’s really an indication of the continued uncertainty surrounding the state’s economic recovery,” Connecticut Business & Industry Association economist Peter Gioia said today.

“While we’ve seen modest gains in jobs and capital investment, that hasn’t been of a scope we would expect from a strong, sustained recovery.”

The Farmington Bank Credit Availability Index (FBCAI) hit a five-year high in the second quarter, jumping 10 points from the first three months of the year to 45.2 points.

The FBCAI’s future expectations component, which measures credit availability three-to-six months from now, improved to 43.4 points, or almost seven index points higher than the previous quarter.

“There’s every indication that credit conditions remain in an upward trend and look to remain favorable heading into the second half of the year,” said John Patrick, president and CEO of Farmington Bank.

Some 22% of respondents rated current credit conditions as either good or excellent in the most recent survey—a five percentage point jump over the first quarter—while 52% said they were average.

“It appears that most area businesses are securing the credit they need for long-run growth,” said Don Klepper-Smith, chief economist and director of research at DataCorePartners.

“The wild card in all of this is healthcare reform, which is likely to impose higher costs on Connecticut businesses, implying greater demand for credit. It will be interesting to see how this all unfolds over the next year.”

Of those who sought financing, 46% were seeking less than $100,000, while 38% wanted between $100,000 and $500,000.

Eight percent of respondents sought financing in excess of $1 million, a one percentage point increase over the previous quarter.

About one-quarter (24%) said they needed financing for working capital, while 15% planned machinery or equipment purchases, and 9% wanted to expand existing plant or office space.

The Second Quarter 2013 CBIA/Farmington Bank Credit Availability Survey was emailed to approximately 1,900 Connecticut businesses in July of 2013. A total of 171 responded, for a 9% response rate and a margin of error of +/- 7.6%.