Business Confidence in Connecticut Improves
HARTFORD, CT — A growing number of Connecticut business leaders expect conditions to improve for their companies, a recent survey found.
Forty percent of business leaders said they foresee conditions getting better, according to the CBIA/Farmington Bank Fourth Quarter Economic and Credit Availability Survey, up from 26 percent who felt that way in the previous quarter.
“It’s heartening to see the jump upward in those expecting better conditions for the economy, their own company, and hiring,” Connecticut Business and Industry Association economist Pete Gioia said in a statement.
Though the survey was regarding the fourth quarter, businesses were polled via email from mid-January to early February, after the presidential and state elections had taken place. There were 173 respondents.
Among them, 39 percent said they expect stable conditions, down from from 49 percent in the third quarter; 21 percent had a negative outlook, down from 24 percent in the third quarter.
A growing number of business leaders, 24 percent, said they expect to grow their workforce, up from 19 percent the previous quarter. Most, however, (65 percent) expected no change and 11 percent planned to cut jobs.
Given the timing of the survey, business leaders were asked how they think policies of President Donald Trump’s administration could affect Connecticut’s economy.
More than half, or 59 percent, thought the administration’s economic, regulatory, and fiscal policies would positively affect growth here, while 6 percent expected no impact and 10 percent expected a negative impact. Another 25 percent were uncertain.
“The outlook for 2017 is clouded with uncertainty but will be a function of proposed tax cuts, emerging trade policies, proposed spending on national infrastructure and proposed rollbacks on federal government regulations, which hopefully will seek to spur new business investments,” DataCore Partners economist Don Klepper-Smith said in a statement.
From a national perspective, the economy is poised for gross domestic product growth of around 2 to 2.5 percent this year, he said, though “the risk of policy error is growing.”
With each quarter’s survey, the Farmington Bank Credit Availability Index is released, assessing the strength of Connecticut’s credit markets. For the fourth quarter it garnered a reading of 47.2, down from 54.7 in the third quarter.
The index is a diffusion index, in which a reading of greater than 50 indicates improvement and one of less than 50 equals deterioration.
Despite the index falling, “credit availability remains strong, led by plentiful bank credit, which is used by most firms using credit,” Farmington Bank CEO and President John Patrick said in a statement.
According to the survey, 29 percent of respondents had used financing in the last three months, and 86 percent of those used bank loans and lines of credit to meet their needs. Most, 90 percent, said they were able to meet their borrowing needs, and 76 percent considered the state’s lending climate to be “average,” “good,” or “excellent.”
Gov. Dannel P. Malloy is expected to address the business community at 10:15 a.m. Wednesday, March 8, at the Legislative Office Building where CBIA members and many chambers of commerce will be gathered for their lobby day.