Connecticut’s economic recovery remains sluggish according to a new survey, as national and global issues continue to impact productivity and sales forecasts.
The Connecticut Business & Industry’s third quarter 2011 economic survey found that while businesses remain cautious, some positive trends emerged.
“This has been a rough year,” said CBIA economist Peter Gioia, “Companies are watching what’s happening in Washington and in Europe and they are concerned about the long road ahead.”
After seeing a steep drop in economic expectations in the second quarter of 2011, CBIA’s latest quarterly survey showed a slight increase in positive expectations for future quarters.
Almost half (48 percent) of respondents felt the state economy would remain stable or improve, compared with just 27 percent in the second quarter. Just nine percent forecast a significant worsening, down from 19 percent the previous quarter.
Confidence in the national economy remains flat, with 10 percent of respondents expecting some improvement (against 11 percent last quarter) and 43 percent say it will remain stable (41 percent).
However, 47 percent expect the national situation to worsen, flat with the second quarter, while reflecting a more pessimistic mood than the third quarter of 2010, when 28 percent expected a decline and 24 percent forecast improvement.
As for industry outlook, 23 percent of those surveyed expected that conditions will improve within their own sector, compared with 19 percent in the second quarter.
Gioia said the survey was completed prior to the October special session of the General Assembly and passage of the bipartisan jobs bill.
“Any sense of optimism in the survey results could be linked to expectations about the pending special session,” Gioia said. “And the jobs bill featured a number of important initiatives and programs which now could have a big impact on the state’s economy.”
Gioia also noted that while the state’s October jobs report showed a second consecutive month of job growth, the Connecticut Department of Labor believed many of those jobs were temporary, attributing them to restoration efforts following tropical Storm Irene.
“While there is good news in the report of additional jobs being created in October, it should be remembered that for year-over-year, we’ve only added 10,100 jobs in total,” Gioia said. “We still have an awful long way to go to fully erase the jobs losses from the recession.”
Third quarter economic survey key performance indicators:
- 35 percent expected increased production and sales for the next quarter, consistent with second quarter findings.
- The percentage of respondents expecting increased productivity fell seven percent to 29 percent in the third quarter.
- 17 percent expected productivity to decrease in future quarters, up from 11 percent in the previous quarter.
CBIA’s third quarter 2011 economic survey was emailed to 2,000 Connecticut businesses in September, 2011. A total of 235 executives responded, for a 12 percent response rate and a margin of error of +/-6.2 percent.