About half of Connecticut business leaders expect unchanged conditions for their firms over the short term, according to a new economic survey.
The 2016 CBIA/Farmington Bank 2nd Quarter Economic and Credit Availability Survey found 49% of businesses expected stable conditions, unchanged from the previous quarter.
Just over one-third (35%) said conditions would improve, up 5% from the first quarter survey, while 17% expect their company's outlook to worsen, down from 19%.
Thirty-two percent said their workforce will increase, compared with 29% in the first quarter, 53% expect no changes (58%), and 14% say they will cut positions (15%).
Over two-thirds (69%) plan capital investments, mainly in environmental compliance (44%), facilities (41%), hiring (40%), and security (35%).
“These findings reflect the trends we saw in the state's economy during mid to late summer, when we had modest job growth,” said CBIA economist Pete Gioia.
“There's a slight uptick in optimism, but the majority of surveyed businesses are still adopting a wait-and-see attitude about the future.”
DataCore Partners' economist Don Klepper-Smith said he expects the state's economy to grow about 1% in 2016, a minor improvement from last year's 0.6% growth, but well below the long-term average rate of 2.5%.
Unemployment remains the highest in New England and our post-recession jobs recovery rate is only 81%.
"However, unemployment remains the highest in New England, and our post-recession jobs recovery rate is only 81%, compared with the national rate of 171%."
The survey also found:
- 87% said credit availability was not a problem for their firm (up a point from the first quarter)
- 35% describe Connecticut’s lending climate as good or excellent, up 10 percentage points
- 97% were able to fully or partially meet borrowing needs over the previous three months (93%)
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 68.5, up 22% from the first quarter, indicating positive expectations about future credit conditions.
“The credit index is now at its highest point since the first quarter of last year and the majority of businesses have ready access to the financing they need,” said John Patrick, Jr., chairman, president, and CEO of Farmington Bank.
The 2016 CBIA/Farmington Bank 1st Quarter Economic and Credit Availability Survey was emailed to 1,800 Connecticut business leaders in April 2016. A total of 202 responded, for an estimated response rate of 11.2% and a margin of error of +/- 7.0%.