A growing number of company leaders expect business conditions in Connecticut to improve in the short term, but most think they will remain stable or worsen, a new survey found.
Thirty-five percent of business leaders said during the second quarter that they predict conditions will improve in the short term, up 5 percent from the previous quarter, according to the 2016 CBIA/Farmington Bank Economic and Credit Availability Survey.
But despite growing optimism among some, most don’t foresee improvement. About half, or 49 percent, said they expected stable conditions, the same as in the previous quarter, and 17 percent expected conditions to worsen, down from 19 percent in the first quarter.
The survey was emailed to 1,800 business leaders throughout Connecticut in September; 117 responded.
“These findings reflect the trends we saw in the state’s economy during the mid-to-late summer, when we had modest job growth,” Pete Gioia, economist at the Connecticut Business and Industry Association (CBIA), said in a statement.
“There’s a slight uptick in optimism, but the majority of surveyed businesses are still adopting a wait-and-see attitude about the future,” he said.
Business leaders have reason to be cautious, said Don Klepper-Smith, economist at DataCore Partners. The state’s economy is on track to grow 1 percent in 2016, up slightly from 0.6 percent in 2015, he said, but that is far below the long-term average growth rate of 2.5 percent.
Compounding the slow growth, he said in a statement, “unemployment remains the highest in New England and our post-recession jobs recovery rate is only 81 percent, compared with the national rate of 171 percent.”
While most are not investing in growing their workforce, the majority of respondents – 69 percent – said they plan to spend on capital investments. The most popular capital investments, according to survey respondents, will be in environmental compliance (44 percent) and facilities (41 percent).
The survey also asked business leaders about the credit and lending environment in the state, of which they had a more positive outlook.
Most, 87 percent, of respondents said credit availability is not a problem for their company, and 97 percent said they were able to fully or partially meet their borrowing needs over the previous three months – both of those numbers marked slight improvements over first-quarter responses.
The Farmington Bank Credit Availability Index was at 68.5 in the second quarter, up 22 percent from the first quarter. An index reading of more than 50 indicates positive conditions.
The index last quarter reached its highest level since the first quarter of 2015, and most businesses have “ready access to the financing they need,” Farmington Bank Chairman, President and CEO John Patrick Jr. said in a statement.