Recovery Slows, But More Than Half of CT Businesses Recorded Profits
by Christine Stuart | Sep 8, 2011 11:47am
(4) Comments | Commenting has expired
Posted to: Business, Labor, State Capitol
(Updated 1:30 p.m.) A Connecticut Business and Industry Association economist said he was “bitterly disappointed” that jobs and job creation didn’t play a more prominent role in the 2011 legislative session, but was hopeful an upcoming special session on jobs will help turn around the state’s economy.
“Jobs will solve a multitude of ills that are out there in the economy right now,“ Peter Gioia, vice president and economist for CBIA, said Thursday when he released the results of the 2011 survey of Connecticut businesses.
The survey was released the same day President Barack Obama is scheduled to deliver, a much anticipated jobs and economic growth proposal to a joint session of Congress. The speech and proposal come at a time when many are concerned another recession could be on the horizon.
“I don’t think we’ve got double dip, but we certainly have some flat lining that’s going on,” Gioia said Thursday.
“What we’re seeing is companies are starting to get on track in terms of capacity for their profitability…but there certainly is a capacity to hire workers out there. But there certainly is also some detriments in terms of how they perceive the business climate and various costs here.”
The survey of 707 businesses found 63 percent of businesses ranked Connecticut, last, next to last, or third from last compared to other states. Only New York was perceived by most businesses as having a heavier regulatory burden. The perception of southern states was substantially better.
Gioia said perception of the state’s business climate, whether it’s accurate or not, matters.
“I think the governor and the heads of the legislature on both sides of the aisle, Republicans and Democrats, need to get together and say, ‘We will do everything we possibly can to improve the economy for businesses and citizens,’” Gioia said. “They don’t have to change the world overnight, but they’ve got to start.”
Janet Prisloe, a partner in Blum Shapiro, the firm that helped compile the survey, said the good news was that 56 percent of the 707 businesses responding reported a net profit in 2010, an increase of 5 percent over what they reported in 2009. The same percentage expect to report profits at the end of 2011. The bad news is about 17 percent anticipate a net loss and about 27 percent are expected to break even in 2011.
But businesses remain optimistic about the potential to hire workers, Prisloe said. About 56 percent added or expect to add jobs in 2010 and 55 percent plan to hire in 2012.
The other interesting finding Prisloe said is the number of Connecticut businesses reliant on large corporations. More than half, or 53 percent of all businesses surveyed, regardless of size depend on large Connecticut companies for businesses.
“Particularly manufacturers in the state. Their health is dependent on the health of the larger corporations,” Prisloe said. “It’s not surprising considering the number of defense contractors in the state.”
The more disturbing trend is the number of companies being approached by other states regarding relocating or expanding outside of Connecticut.
In the last year alone 17 percent of the respondents were approached by economic development teams from other states and invited to relocate or expand there.
Recruiting of manufacturers was especially vigorous with 52 percent saying they were courted by other states in the last five years with 69 percent being approached in the last year alone.
A few miles away in Hartford Thursday morning Gov. Dannel P. Malloy attended a press conference that projected a five-year turnaround in the construction industry in large part because of state funded capital projects, such as the Hartford-New Britain Busway and renovations at the Uconn Health Center in Farmington.
A new report from Capitol Workforce Partners identifies an impressive list of construction projects in and around the North Central Connecticut region and estimates about $5 million will be spent on construction work in the next five years.
“This new report is good news for the construction and trades industries and it’s good news for our state’s economy,” Malloy said.
“I wanted to be here because I wanted you to understand my administrations dedication to getting things built in Connecticut,” Malloy said. “We are moving projects along on a comparative basis that is at breakneck speed.”
It’s no secret that the construction industry has been facing some of the highest unemployment rates in the state.
“It is disturbing the level of unemployment amongst skilled trades people, as well as engineers and architects,” Malloy said. “Perhaps the architect number that I heard nine months ago is the most disturbing.”
He said architectural firms were talking about a 40 to 45 percent job reduction in Connecticut. He said that’s disturbing because if you don’t have architects working on projects they’re not going to come into the marketplace for bids.
Since taking office in January, Malloy has been aggressive with his bond agenda and has borrowed billions of dollars for capital improvements across the state.
Tags: CBIA, jobs, Gioia, economy, growth, confidence
(4) Comments
posted by: Disgruntled | September 9, 2011 7:47am
FirstFiveJive,Southern style…
Gov. Nikki Haley spent $127K on a trip to Paris and Munich and claims to have lured two companies to her state as a result of her junket.One wonders if they were coming already? One wonders if they will come at all.
A page out of The Nutmeg Kings playbook.
Travel is fun on the taxpayers dime. All we need is Chris Shays back in office and we can open a travel bureau or two in the state.
posted by: Disgruntled | September 9, 2011 9:01am
And Nikki responds,very much like Dan would:
http://www.postandcourier.com/news/2011/sep/07/07haley/
It is good to see that the news folks declined her invitation to tag along…one of the oldest tricks by deadbeat politicians.
I recall Dan dragging all sorts of folks along to CHINA at the taxpayers expense.
Nice work if you can get it.I especially like the way she “saved” money by getting BMW to provide some ground transporation.
Amazing how pols can spin the concept of free lunches!
posted by: Disgruntled | September 9, 2011 9:26am
A final note,not my words, about politicians and their desire to travel and spend as public “job creators”:
“Hmmmm …
Look, we have no problem “spending money to make money.” In fact, that’s standard business practice – for corporations. That’s the problem, though. State government isn’t a corporation – in fact, its efforts to vaguely resemble one have been a spectacular and increasingly costly failure.
How come? Because it’s not the job of South Carolina’s government to create jobs – it’s the job of South Carolina’s economy to create jobs.
Government’s job? To perform a few core functions (i.e. cops and courts) and then, in the words of the rapper Ludacris, “move, bitch … get out the way.”
In fact, when the state “spends money to make money” – whether that’s $127,000 (and counting) for Haley’s Paris trip or $900 million (and counting) to land Boeing – that’s money everybody else in the private sector has to absorb.
Our leaders have spent millions traveling the globe in pursuit of economic development – and they’ve shelled out billions in incentives. Unfortunately, all we’ve got to show for that as a state is the third-highest unemployment rate in the nation, a plummeting competitive position and a recessionary economy.”
posted by: Careful | September 9, 2011 3:01pm
50 years ago, former State Democratic Committee Chairman John Bailey paid the welfare crowd to move to Connectict for their votes. The Democrats now have the big city social benefits votes to win state elections, but lacks skilled workers for jobs—which forces some business to move out of state - to find the skilled workers to be competitive and survive.