Survey: Growing Concerns with State’s Economy, Business Climate
Hartford, CT – A new survey of Connecticut businesses reveals growing concerns about the state’s direction, with election-year calls for a renewed focus on economic growth and job creation.
The 2018 Survey of Connecticut Businesses, produced by CBIA and the public accounting and business advisory firm Marcum LLP, found broad anxiety about the state’s economy and business climate.
While 85% of surveyed business leaders forecast moderate to strong U.S. economic growth over the next 12 months, just 18% feel the same way about Connecticut’s economy, with 52% expecting conditions to remain static.
The survey found 81% percent disapprove of the legislature’s handling of the economy and job creation, while 14% were neutral and just 5% approve.
“Unfortunately, business leaders feel not enough lawmakers take the state’s challenges seriously,” said CBIA president and CEO Joe Brennan.
“They want change and an aggressive, sustained focus on driving economic growth and job creation.”
The survey, released today at the annual Connecticut Economy conference in Hartford, shows the cost of doing business and the uncertainty and unpredictability of legislative decision-making as the primary factors hampering growth in the state.
Seventy-one percent of survey respondents said Connecticut’s economic issues will impact their vote this November more than in previous elections.
Over one-third (37%) of business leaders believe cutting government spending should be the top priority for Connecticut’s next governor and General Assembly, while 30% cited fixing the state’s economy and business climate.
More than two-thirds (69%) of Connecticut companies reported profits in 2017, an increase of three percentage points over the previous year.
Eighteen percent reported losses, up marginally from 17% in 2016. The percentage of those breaking even fell four points to 13%.
Looking ahead, 73% forecast a profitable 2018, 19% expect to break even, and 8% predict losses.
Forty-three percent of survey respondents report sales growth, 44% say they are holding steady, and 13% note a decline in sales.
The survey reveals businesses are adapting and evolving to improve their competitiveness, expanding markets domestically and internationally, with many also shifting production out-of-state to escape Connecticut’s high costs.
“Connecticut companies continue to see growth, which is a positive, but at a rate that is lower than the national average, and significantly lower than some of our direct neighbors,” said Marcum LLP office managing partner Michael Brooder.
“Uncertainty at the state level plays a large part and will continue to leave the state in flux until it is corrected.”
Workforce, Federal Issues
When it comes to hiring, 39% of businesses report their workforce is growing, 51% expect to maintain current employment levels, and 10% say their workforce will decline.
The shortage of skilled workers remains an issue, with many businesses shifting investment priorities to recruiting and training initiatives and away from capital expenditures and research and development.
With millennials now the largest generation in today’s workforce, a majority of companies are taking specific steps – including offering flexible schedules and engagement programs – to recruit and retain younger employees.
Forty-four percent said federal tax reform will have a positive impact on their business, with 63% predicting it will help the U.S. economy.
Of those companies positively impacted by last year’s tax overhaul, 48% increased employee salaries and/or benefits, 37% expanded their facilities, 31% increased hiring, and 26% added employee training programs.
More than half of those surveyed are worried about the potential negative impact of federal tariffs and trade disputes, with steel and aluminum levies driving heightened concern among manufacturers.
The 2018 Survey of Connecticut Businesses was mailed and emailed in mid-June through late July to approximately 6,400 top executives throughout Connecticut; 313 participated in the survey, with a margin of error of +/–5.6%.
About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.