HARTFORD: According to a new survey from the Connecticut Business and Industry Association [CBIA] As concerns grow over the state’s budget stalemate, fewer Connecticut businesses expect growth according to the results of a new survey released today.
The drop in confidence shows in the responses to The 2017 CBIA 2nd Quarter Economic and Credit Availability Survey, it found that just 29% of business leaders have a positive outlook for their firm—down from 37% in the first quarter.
CBIA reported fifty-seven percent expect stable conditions [up from 47% last quarter], while 14% had a negative outlook, down from 16%.
Approximately a quarter of companies, 23% of expect to increase their workforce, down from 26% in the first quarter, while 66% forecast no change (66%), and 12% plan reductions (8%).
“The survey is indicative of an economy that is growing, just quite slowly,” said CBIA economist Pete Gioia. "However, it's clear that as the budget stalemate continues, more and more businesses are avoiding making major investments until they see signs of predictability and stability. "That means a budget with no tax hikes—sooner rather than later," he added.
DataCore economist Don Klepper-Smith said the survey highlights how critical the outcome of budget negotiations will be for the state’s economy and job growth saying, "businesses generally remain optimistic with respect to their own sales and business activities, but less so when it comes to state finances and overall Connecticut economic growth,” adding “importantly, businesses are looking for state finances to reflect some degree of fiscal discipline before they make big long-term commitments in-state.”
Of those surveyed, 83% reported credit availability was not a problem during the second quarter.
Nineteen percent characterized Connecticut’s current credit conditions as excellent or good, while 61% called conditions average, and 21% as fair.
The survey found:
33% of respondents used financing in the last three months (compared to 30% in the first quarter of 2017)
The same percentage of firms in the 2nd quarter were able to satisfy their borrowing needs as last quarter (86%)
62% expect the lending climate to remain stable over the next three months (59%), 21% say it will be fair or poor (24%), and just 18% believe it will be good or excellent (16%)
Businesses were also asked about the impact of recent national economic and policy issues.
40% said low inflation had no impact on their business, while 37% said it was positive
Oil prices below $50 a barrel had a positive impact for 51% of those surveyed, 28% said it had no impact, and 9% called it a negative
More than two-thirds (68%) say federal tax reform (e.g., a 15% corporate rate) would be positive
43% said repealing and replacing the Affordable Care Act would have a positive impact, 17% saw it as a negative, and 15% saw no impact
The 2017 CBIA 2nd Quarter Economic and Credit Availability Survey was emailed to businesses in mid July/August, with 127 responses and a margin of error of +/- 8.8%.