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CBIA survey: CT Inc. still cautious

BY Gregory Seay

6/7/2017
Connecticut executives and entrepreneurs finished the first quarter a bit more confident in the course of the state and national economies, a Connecticut Business & Industry Association (CBIA) co-sponsored survey shows.

Just over one in three business leaders, or 37 percent, expect improved conditions for their firms in the second quarter, down from 40 percent who expected the first quarter to be better, according to the 2017 CBIA/Farmington Bank 1st Quarter Economic and Credit Availability Survey.

Forty-seven percent expect stable conditions vs. 39 percent in the fourth quarter survey, and 16 percent had a negative outlook, down from 21 percent, CBIA said.

About a quarter (26 percent) said they expect to increase their workforce, up from 24 percent, while 66 percent forecast no change (vs. 65 percent previously) and 8 percent plan reductions (11 percent previously).

Of those surveyed, 86 percent reported credit availability is not a problem for them and the majority (76 percent) would characterize Connecticut's current credit conditions as excellent, good, or average.

The 2017 CBIA/Farmington Bank survey was emailed to businesses in late April/early May, with 134 total responses and a +/- 8.5 percentage-point margin of error.

"This survey shows that credit availability is on track to support economic growth, but businesses are still somewhat hesitant to invest, likely due, at least in part, to Connecticut's fiscal crisis," said CBIA economist Pete Gioia. "It's still imperative that a solid, predictable state budget is adopted to rebuild the confidence for businesses to create investments that lead to jobs and economic growth. The two are intertwined."

DataCore Partners economist and Farmington Bank adviser Don Klepper-Smith said he believes that businesses were adopting a "wait-and-see attitude" pending the outcome of the state budget.

He said the uncertainty over the budget was also reflected in the state's sluggish job growth, the slowest among the New England states over the last 12 months.

"Connecticut's jobs recovery hit a soft patch in early 2017," Klepper-Smith said. "There is overwhelming data evidence to suggest we are in the 'unproductive zone,' meaning that further increases in state and local taxes will be counterproductive to economic growth in the long run.