Survey Finds Businesses Are Still Struggling, But Nearly Half Will Be Hiring
A survey of 580 Connecticut businesses found that many are still struggling in a “post-recession economy.”
The survey published by the Connecticut Business & Industry Association found that business profitability has not rebounded to prerecession levels, but continues on a slight upward trajectory. Fifty-nine percent of the businesses surveyed recorded a net profit in 2011, and 57 percent expect a profit in 2012.
And while many companies have a negative view of Connecticut as a place to operate a business, the percentage of companies looking to relocate to another state in the next five years is down 18 percent from last year.
However, concerns about Connecticut’s economy ranked second for businesses, followed by tax increases. Roughly equal numbers of businesses are worried about Connecticut’s sluggish job growth and international economic instability and about 8 percent of businesses were worried about state and federal regulatory burdens.
“We need to restore business confidence in Connecticut in order to secure job growth and create a bright economic future,” John Rathgeber, CBIA’s president and CEO, said. “But to do so we must address our state fiscal challenges, business costs, workforce preparedness and infrastructure needs.”
Manufacturing seems to be rebounding in the state according to the survey.
Nearly two-thirds of manufacturers included in the survey recorded a net profit in 2011 and 66 percent expect to in 2012. Manufacturers also had fewer net losses. Thirteen percent saw a net loss in 2011, and 7 percent expect a loss in 2012. Another 23 percent broke even in 2011, and 28 percent expect to in 2012.
Of all the different types of businesses surveyed 43 percent anticipated hiring full-time workers in 2012. But finding workers to fill those jobs is still a concern especially in light of the large number of baby boomers in the workforce. About 47 percent of businesses reported difficulty finding qualified workers.
“Connecticut’s new education reform law and expanded precision machining training in several of the state’s community colleges was helping address the state’s talent shortage,” Rathgeber said.
But it may be too little, too late.
One out of every four businesses surveyed expects at least 10 percent of their workforce to retire in the next five years; half of those anticipate losing over 20 percent of their workforce to retirement in that period. Forty-six percent say they are not very confident, not at all confident, or unsure of their ability to find qualified workers to meet their needs over the next three years.
The survey reflected an improvement in the lending climate and access to capital: Half of all businesses surveyed introduced a new product or service in the past 12 months, more than half plan to over the next 12 months, and only 2 percent rank credit availability as their top concern through the end of 2013.
“The fact that business profitability has yet to recover to its pre-recessionary levels is not surprising,” Don Klepper-Smith, chief economist and director of research at DataCorePartners, said. “It is indicative of the overall slow pace of economic expansion, underlying economic uncertainty and profound structural changes that are often underappreciated.”