Confidence among Connecticut’s business owners dipped in the fourth quarter of 2012 on government inaction, a new survey by the Connecticut Business & Industry Association (CBIA) shows.
Just over half of the business leaders who responded to the survey said they expect Connecticut’s economy to be worse in 2013. That represents an eight percentage point increase from the CBIA’s third quarter 2012 survey.
Pete Gioia, CBIA vice president and economist, said he believes the timing of the survey, which occurred during the height of fiscal cliff discussions, may have had an influence on the community’s reported optimism.
“I don’t think dragging these cuts out is helpful,” Gioia said. “What is helpful is coming to a conclusion and a decision, and giving everyone involved certainty.”
Similarly, confidence among the manufacturing sector, which stands to be impacted by the outcome of talks to avert the defense and discretionary spending sequester in Congress, has also taken a beating.
By the end of 2011, 45 percent of manufacturing and distribution respondents reported they were thriving and 83 percent reported a positive outlook, according to an annual McGladrey L.L.P. survey. By the end of 2012, however, only 25 percent of respondents said they were thriving and 70 percent reported they were optimistic.
The annual survey polled 275 participants nationwide.
A nearly 10 percent decline in net income projections and a 20 percent drop in additional hiring expectations for manufacturers remains significant, McGladrey representatives said.
“Nationally and locally, companies that are integrally involved with the U.S. government and the Department of Defense spending has already seen signs of slowing orders and delayed commitments,” said Steve Menaker, a partner with McGladrey.
“While there may be hope of avoiding the drastic cuts in the sequestration, the impact of this uncertainty will definitely impact sales and profitability. Companies are adjusting their budgets for 2013 due to delayed or smaller purchases, and this may ultimately impact equipment purchases, hiring and potentially terminations,” Menaker said.