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November 6, 2015

State's business leaders fear interest hike

More than half of Connecticut business leaders expect an increase in interest rates by June 2016, according to a new survey. Two in five fear it would have a negative impact on their businesses.

“The economy is growing, however, the rate has been slow compared to our own long-term growth rate, and when compared to the U.S. average” said Pete Gioia, CBIA vice president and economist. “Combined with the state’s fiscal situation, it’s clear we’re at a critical turning point and lawmakers need to make decisions that will encourage growth, not hinder it.”

The 2015 CBIA/Farmington Bank 3rd Quarter Economic and Credit Availability Survey found, though, business leaders’ outlook for their firms remains relatively optimistic, with most forecasting improvement or stability in the coming months.

Specifically, 34 percent forecast improvement, the same as last quarter, while 48 percent expect their firm to remain stable, compared to 52 percent last quarter. Only 17 percent expect a decline, up slightly from 13 percent last quarter.

Of those surveyed, 23 percent are hiring and 60 percent plan to remain stable in their workforce. However, 16 percent anticipate downsizing over the next few months, compared to 10 percent last quarter.

The survey also found 31 percent have used credit in the last three months to meet their financing needs. 

The survey also notes the Farmington Bank Credit Availability Index. It is a diffusion index that speaks to the health of Connecticut’s credit markets. This quarter, the index showed a clear upturn in current conditions and future expectations with a rating of 61.1, up from 57.4 last quarter.

“As businesses become more confident about their future in Connecticut, banks are ready with credit financing to help them expand, whether it’s through innovative new products or capital investments,” said John Patrick, Jr., CEO and president of Farmington Bank.

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