
HARTFORD, CT — A majority of companies located in the “Knowledge Corridor” that runs between New Haven and Springfield, Mass. turned a profit in 2017 and an even greater amount expect to be profitable in 2018.
However, their outlook for the future of the region’s growth is mixed, according to a survey released Wednesday.
The survey, conducted every two years by the Connecticut Business and Industry Association and New England’s Knowledge Corridor, found that less than a third of the 440 business leaders who responded believe the region’s economy will improve next year. At least 38 percent believe it will remain stable, while 33 percent are expecting worsening conditions.
Businesses are split about the regional outlook for the next five years. Forty-six percent are optimistic about the region’s economy over that period, 44 percent are pessimistic, and 10 percent have no opinion.
The region is the second largest population, education, and economic center in New England and the nation’s 20th largest metro region, ranked ahead of Denver and St. Louis, with twice the population density, according to the survey. They survey found that quality of life remains the greatest benefit for managing a business in the region.
But there are challenges, too.
The main challenges for the region are “high costs” and a shortage of workers with the right skills, Pete Gioia, CBIA vice president and economist, said.
Twenty-eight percent of the survey respondents said one of the main barriers to growth was high taxes, which was down from 31 percent in the 2015 survey. Other challenges reported include the weak economy, shortage of labor, regulatory climate, infrastructure issues, cost of energy, and real estate availability.
Gioia said the survey found there will be a large number of retirements at businesses in the corridor over the next five years, and they’re struggling to find the younger workers to fill those jobs.
While more than half of the survey respondents do not expect any retirements this year, 78 percent will be addressing the challenge of replacing retiring workers by the end of 2019. One-third expect to lose up to 5 percent of their workforce by the end of next year. Another 28 percent say between 6 percent and 20 percent of their employees will retire over the same period, jumping to 39 percent by the end of 2019.
Thirty-four percent experience difficulties both finding and retaining young workers, 20 percent have trouble just finding them, while retention alone is an issue for 9 percent.
The top three challenges for finding younger workers are a lack of skills or education (cited by 45 percent), 18 percent cite competition from other area firms offering higher wages or better benefits, and 14 percent cite the overall cost of living in the region.
Gioia said part of the challenge is that millennials seem to want to live in more urban settings with more access to public transit.
The I-91 corridor is expected to get commuter rail service between Springfield and New Haven by May 2018.
Twenty-two percent of those surveyed said they or their employees will use the new Hartford Line commuter rail between New Haven and Springfield once it begins service, while 53 percent will not use it, and 25 percent were uncertain.
An overwhelming 90 percent of business leaders say expanding commuter rail service between Boston and Springfield will benefit their business, while 91 percent believe it will positively impact the region’s economy.
“For the Knowledge Corridor to remain competitive, it must continually strive to expand its transportation connections and choices,” Tim Brennan, executive director of the Pioneer Valley Planning Commission, said.
Meanwhile, 66 percent of the I-91 corridor’s business leaders say traffic congestion and poor and deteriorating infrastructure are the most pressing transportation issues facing the region. Twenty-one percent cited the lack of mass transit options. Both findings are unchanged from 2015.