Fifty-two percent of a group of 200-plus Connecticut manufacturers say they have been recruited to relocate to or expand within other states, according to a new survey.
Companies surveyed by the Manufacturing Alliance of Connecticut (MAC) say economic conditions aren”™t improving fast enough to counter the rising costs of doing business in Connecticut.
Fourteen percent of the 211 companies that responded to the MAC survey, which was conducted earlier this spring and released June 3, rated Connecticut”™s manufacturing industry as “excellent” or “good.” The remaining 86 percent that responded characterized the state of the industry in Connecticut as “fair” or “poor.”
A majority of the respondents said their sales were higher in 2012 than in 2011, but that they did not rise as much as forecasted. Just over 50 percent of the firms said they are projecting higher sales this year than in 2012.
Those sentiments have a large number of manufacturers at least considering an out-of-state relocation or expansion of their operations, said Frank Johnson, president of MAC.
“Companies are not happy with the economic conditions here in Connecticut and they”™re not happy with the direction the state is moving in,” Johnson said.
Of the 52 percent who said they had been courted by other states, half said they considered relocating or expanding elsewhere. Among those that said they considered a move, their primary explanations were the government attitude here in Connecticut, operating costs and the state”™s tax regimen.
“I think there”™s just a prevailing feeling in Connecticut that government is not doing all that it can do to try to create a healthy manufacturing environment here,” Johnson said. “There”™s a feeling that despite the best efforts of some legislators and despite the good efforts of the governor … we continue to pass legislation that is harmful to manufacturers.”
While many of the problems are home grown, Jay Mazur, president of a Derby company that makes custom rubber molds and parts, said other challenges are broader.
“The big concern I have, the immediate concern, is what”™s going to be the impact of Obamacare,” said Mazur, of Gordon Rubber & Packing Co. Inc. Now, in addition to the regular increases in premiums, companies are faced with uncertainty over the implementation of the Patient Protection and Affordable Care Act, Mazur said.
“Nothing seems to be written in stone at this point, so it”™s kind of like saying, ”˜Hang on for the ride, we”™re not sure where we”™re going.”™ And that”™s a concern with no real answers at this point,” Mazur said.
However, Mazur said the state”™s weakening fiscal condition has not gone unnoticed.
“Connecticut is in a lousy financial state,” he said. “You see the challenges they face up there trying to put a budget together.”
Mazur said his company, due to the nature of its facilities and equipment, likely isn”™t going anywhere. But he said he didn”™t expect many outside firms to consider moving to Connecticut given its fiscal state.
“I think you”™re not going to see a whole lot of new entries into Connecticut, given the state of the state,” he said. “In my opinion, it”™s not a very investment-favorable climate.”
For other companies, like FuelCell Energy Inc. of Danbury, Connecticut is the ideal location due to its highly educated workforce.
“The intellectual property and the smart workers are really what got us here, and that for the most part resides in Connecticut,” FuelCell CEO Arthur “Chip” Bottone told the Business Journal in a May interview.
FuelCell, which does all of its manufacturing in Torrington, has about 550 employees in Connecticut. The manufacturing facility “is not something you would want to take to a low labor-cost area per se, because the savings really aren”™t there,” Bottone said.
