Connecticut businesses are feeling a bit more upbeat about their ability to secure credit over the near-term according to the Second Quarter 2014 CBIA/Farmington Bank Credit Availability Survey.
Overall, the survey reflects moderately higher levels of business confidence given the backdrop of just modest economic growth.
“We’re on par with the confidence that we were seeing a year ago,” said Connecticut Business & Industry Association economist Peter Gioia today.
“However, there’s still a way to go before reaching the record levels we saw in 2007, prior to the last recession.”
Gioia adds that credit availability is crucial to the overall health of Connecticut’s small business sector, a leading player in job creation.
The Farmington Bank Credit Availability Index (FBCAI) was recorded at an index level of 43.9, up a modest 13% from the last quarterly reading of 38.8.
This level is basically unchanged from a year ago, when a level of 44.3 was recorded.
“The rebound in the second quarter credit availability readings is further evidence that economic recovery is likely to continue here in Connecticut for the balance of the year,” said Don Klepper-Smith, chief economist and director of research at DataCore Partners in New Haven.
“Today’s business environment is challenging, to say the least, and timely access to credit is the lifeblood for many Connecticut firms.”
“With the most recent survey, we’re hopeful that credit conditions will remain on an upward trend for the rest of the year,” said John Patrick, president and CEO of Farmington Bank.
Only 20% of respondents rated current conditions as either good or excellent in the most recent survey; 53% rated conditions as average, and 27% characterized them as either poor or fair.
While 20% of businesses anticipate some improvement in credit conditions over the next three to six months, 24% expect conditions to deteriorate. More than half (56%) expect lending conditions to remain the same.
When asked how they would use financing if available, 48% said they would invest in new plant and equipment; 21% would hire more employees.
The Second Quarter 2014 CBIA/Farmington Bank Credit Availability Survey was emailed to approximately 3,100 Connecticut businesses in July 2014. A total of 219 responded, for a response rate of 14% and a margin of error of +/- 6.8%.