CT Inc. gloomier on the economy

Connecticut entrpreneurs have grown gloomier in their outlook for the state and national economy, a fresh survey shows.

The Connecticut Business & Industry Association's second-quarter 2010 economic survey shows little growth in key performance areas, and business confidence for an improving economy is waning.

The bright spot in the survey is that most respondents expect their companies to do well, and that could lead to hiring.

Only 20 percent of respondents expect the national economy to improve, down from 42 percent in the first quarter of the year and 36 percent in the fourth quarter of 2009. Forty-three percent expect the national economy to worsen, the highest number in more than a year, when the economy was plagued by recession.

As for the Connecticut economy, only 11 percent expect improvement, down from a high of 23 percent last quarter but up slightly from 8 percent a year ago. Only half expect Connecticut's economy to worsen, up from 43 percent last quarter but down from a high of 66 percent a year ago.

"The economy has been slowly growing for the past few months, but this survey shows that business executives are not optimistic about the small, incremental improvements we've been experiencing," says Peter M. Gioia, CBIA vice president and economist. "While the numbers have grown from the lows recorded at the beginning of 2009, we need to see favorable credit conditions, a surge in overtime, and fewer unemployment claims before Connecticut has sustainable long-term businesses and job growth."

Other highlights:

• One-third of respondents expect their firms to improve, down from 48 percent last quarter but up from 18 percent a year ago. One-fifth of respondents expect worsening conditions at their companies, down from a high of 33 percent a year ago.

• On the hiring front, 17 percent of business executives expect to increase their workforce in the next quarter, while 41 percent plan to hire additional full-time workers by the end of the year.
  
• Thirty-five percent expect production/sales to increase, down from 52 percent last quarter but up from 25 percent a year ago. Twenty-three percent expect a decrease, up from 17 percent last quarter but down from 37 percent a year ago.

• More than a third (38 percent) expect productivity to increase, down from 49 percent in the first quarter, but up from 24 percent a year ago.

The survey was conducted by CBIA in July. A total of 374 businesspeople responded, for a 14 percent response rate and a margin of error of plus or minus 5 percent.