Most Connecticut business leaders expect conditions at their companies to remain steady or improve over the next few months, according to a survey released Tuesday.
About 49 percent of those surveyed during the first quarter said business conditions at their companies will remain stable in the next three months, according to the 2016 CBIA/Farmington Bank 1st Quarter Economic and Credit Availability Survey. Another 24 percent expected them to improve somewhat, and 6 percent expected them to improve significantly.
While that means most business leaders overall are optimistic, fewer feel that way than did in the previous quarter. In the final quarter of 2015, 57 percent of respondents expected conditions to remain stable, more than felt that way last quarter. The percentages of those who expected conditions to improve somewhat and significantly were the same both quarters.
Against that backdrop, 87 percent of company leaders said in the first quarter that they expect their workforces to grow or remain stable over the next three months, unchanged from the final quarter of 2015, the survey found. The majority of those people — 58 percent of overall respondents — expect their workforces to remain stable.
“Business owners will only invest and create jobs if they feel business conditions are improving,” CBIA economist Pete Gioia said in a statement. “To turn this cautiously optimistic outlook into reality, we must make economic growth a top priority in the state.”
The survey was emailed to 1,800 business leaders statewide in April and 202 responded. The largest share of those responding, 42 percent, were manufacturing firms, followed by 10 percent in business and professional services and 10 percent in “other” sectors. The survey has a 7 percent margin of error.
About three quarters of the firms responding were in Hartford, New Haven, or Fairfield counties.
Connecticut’s business climate has come under scrutiny in recent months, with General Electric announcing it was moving its headquarters from Fairfield to Boston. A state commission has been established to assess and examine the state’s economic competitiveness.
Of the business leaders who responded to the CBIA/Farmington Bank survey, 61 percent said they plan to make capital investments in the coming quarter. Most often, those investments were expected to be ones that increase production or sales and reduce operational costs, according to the survey.
In addition to gauging business sentiment about the economy, the survey also asked participants about lending conditions. It found that most, 88 percent, said credit availability is not a problem and 95 percent have seen no changes in lending terms.
Most — 56 percent — consider the state’s lending climate average, while 25 percent call it good or excellent.
Credit conditions will continue to improve once the state and national economies do, said John Patrick Jr., Farmington Bank’s chairman, president and CEO.
“Credit conditions often reflect general economic uncertainty,” he said in a statement. “We must all continue to work hard to get businesspeople, especially small-business owners, who are the economic drivers for job growth in the state, the capital and the confidence they need to grow their businesses and create jobs.”
Of those who accessed credit during the first quarter, 84 percent used bank loans or lines of credit, the survey found.