Business leaders have grown less optimistic about the conditions facing their companies in Connecticut, according to a new survey.
In the third quarter, just 26 percent of executives polled expected conditions to improve in the fourth quarter, down from 35 percent in the previous quarter. At the same time, 24 percent expected their companies’ outlook to worsen, up from 17 percent in the previous quarter.
Those are among the findings of the CBIA/Farmington Bank Third-Quarter Economic and Credit Availability Survey.
When asked about their workforces, 19 percent of respondents expected to add jobs, down from 32 percent in the second quarter. Another 23 percent planned to cut jobs and 59 percent foresaw no changes, according to the survey.
Business leaders are being cautious amid economic uncertainty, said Connecticut Business & Industry Association economist Pete Gioia.
“While the probability of a recession is likely low, it’s important to note that more companies are preparing for a reduction in staffing,” he said. “As the economy struggles to regain jobs, it’s always important to ask why companies are losing them and, right now, we don’t know.”
The quarterly survey was as emailed to business leaders statewide in November, and 176 responded.
To many, the biggest news to break in November were Election Day results – not only the election of Donald Trump as president, but numerous state legislative races that were decided.
The day after the election, CBIA president Joe Brennan released a statement, saying in part: “Now that the voters have spoken, it is vitally important that policy makers work in a truly bipartisan manner to address voters’ top concerns: the economy, job creation, and the affordability of our state.”
He continued, “Connecticut has tremendous economic assets and we are beginning to see heightened focus on the state’s challenges. By listening to voters and working closely together, lawmakers can solve the state’s fiscal problems, restore confidence in Connecticut as a great place to do business, and make our state a leader in economic growth and job creation.”
DataCore Partners’ economist Don Klepper-Smith noted that the state has lost 14,900 jobs since June and continues to trail the region and much of the country.
Klepper-Smith expects the state’s economy to grow at a modest 1 to 1.5 percent in both 2016 and 2017, well below the long-term average annual rate of 2.5 percent.
Among the bright spots in the third-quarter survey, 79 percent of those asked said Connecticut’s lending climate is average or better. But 28 percent expected the lending climate to deteriorate in the following quarter, up from 18 percent who had that fear in the second quarter.
Slightly more than one-third, or 38 percent, said they had used financing over the last three months, with most of them using bank loans or lines of credit, the survey found.
Of those who tapped into financing options, most sought them for working capital or purchases of machinery or equipment.
“As businesses look to grow and invest here in Connecticut, credit conditions remain favorable for them to do so,” John Patrick Jr., chairman, president, and CEO of Farmington Bank, said in a statement.
The Farmington Bank Credit Availability Index is released with each quarterly survey and last quarter garnered a reading of 54.7. A reading over 50 means conditions are considered to be improving, but the third-quarter reading fell from 66.7 in the second quarter.