HARTFORD, CT — With the state budget in limbo, Connecticut business leaders are remaining cautious, according to a new survey.
Nearly half, or 47 percent, of business leaders polled last quarter expected conditions to remain stable over the next three months, according to the CBIA/Farmington Bank 1st Quarter Economic and Credit Availability Survey. That’s up from 39 percent in the fourth quarter of last year.
Another 16 percent of respondents expected conditions to deteriorate, down from 21 percent who felt that way the previous quarter; and 37 percent expected conditions to improve, down from 40 percent the previous quarter.
An unsettled state budget largely played a key role in business leaders’ attitudes, said Connecticut Business and Industry Association economist Pete Gioia.
“It’s still imperative that a solid, predictable state budget is adopted to rebuild the confidence for businesses to create investments that lead to jobs and economic growth,” he said in a statement. “The two are intertwined.”
Budget uncertainty also is playing a role in Connecticut’s slow job growth, which is the slowest in New England over the last year, said DataCore Partners economist and Farmington Bank adviser Don Klepper-Smith.
“Connecticut’s jobs recovery hit a soft patch in early 2017,” he said in a statement. “There is overwhelming data evidence to suggest we are in the ‘unproductive zone,’ meaning that further increases in state and local taxes will be counterproductive to economic growth in the long run.”
The survey was emailed to business leaders in late April and early May, garnering 134 responses.
About one-quarter, 26 percent, of business leaders said they expected to grow their workforces in the next three months, while 66 percent planned no change and 8 percent planned to cut jobs, the survey found.
“This survey shows that credit availability is on track to support economic growth, but businesses are still somewhat hesitant to invest, likely due, at least in part, to Connecticut’s fiscal crisis,” said Gioia.
Many businesses are eyeing automation, the survey found – 27 percent invested in it within the past year while another 30 percent plan to invest in it during the coming year.
“That reflects growing concern among businesses about the pattern of costly proposed workplace mandates introduced in the General Assembly,” Gioia said. “The good news is that the General Assembly has rejected new mandates this session.”
When asked about credit conditions, most – 76 percent – said Connecticut’s are excellent, good or average.
“Credit availability and financing needs should not be a concern to business leaders as they look to invest and grow here in Connecticut,” Farmington Bank Chairman, President and CEO John Patrick Jr. said in a statement. “Banks are willing and able to help those companies in need of financing to meet their goals.”