A seesaw economy teeters into 2012 in Fairfield County and Connecticut, as banks appear to be more comfortable lending but businesses remain wary about hiring.
In the third quarter, Connecticut banks increased total loans and leases outstanding by a remarkable 5 percent, putting an additional $2.6 billion into the hands of Connecticut businesses and consumers. That easily eclipsed a 0.3 percent increase nationally as tracked by the Federal Deposit Insurance Corp., and made up some of the ground from a larger drop last spring, as reported at the time by the Fairfield County Business Journal.
The increased loan activity came as the percentage of delinquent loans fell to 2.5 percent of all those outstanding in Connecticut, down from a peak level of just under 3 percent of loans outstanding a year ago.
In theory, more money on the street means more money for consumers and businesses to spend and so bolster the economy, hopefully setting the stage for a faster recovery in 2012. That did not appear to be the case in the Fairfield County area in November, according to estimates by the Connecticut Department of Labor, with its surveys suggesting local employers shed 500 jobs, leaving Fairfield County with 1,300 fewer jobs from a year ago.
“I think the economy needs certainly in the next 12 to 18 months to generate some momentum in the opposite direction,” said Neil Rosen, CEO of eWayDirect with an office in Southport, whose software helps companies generate sales leads and refine their brand strategies. “Right now, the turmoil in the government is making it very difficult for companies to take any risks.”
Statewide in November, Connecticut employers generated a fourth straight month of job increases ”“ albeit a meager one at an estimated 100 jobs, according to the DOL. That brought the state unemployment rate down to 8.4 percent, its lowest level in two-and-a-half years, even as the U.S. unemployment rate sank at a faster pace to 8.6 percent, from 9 percent in October.
“We were surprised to see that the jobs survey did not pick up any increased employment due to the emergency power line and tree remediation caused by the Halloween snowstorm,” said Andy Cardon, the DOL”™s director of research, in a prepared statement. “It is possible that since much of the additional workforce came from out of state, the additional jobs will be reported in their home communities.”
Connecticut has recouped just 30 percent of the jobs it lost in the Great Recession, according to the DOL.
In November, business support services grew at the fastest pace both from October and a year ago. Construction employment dropped by a reported 2.6 percent from October, the most severe decline of any industry in that one-month period, while the financial and real estate industries are down the farthest from a year ago at 2.6 percent. Entering December, economists with the New York Federal Reserve noted financial industry conditions remain adverse, with several thousand layoffs reportedly in the pipeline in the New York City area and regulatory uncertainty hampering planning for those companies.
In his own outlook delivered in Albany, N.Y., in November, the president of the New York Federal Reserve said the economy is operating far below its productive potential, though the tristate area”™s manufacturing sector showed signs of stabilizing in November after having weakened five straight months.
“We ”¦ continue to face significant downside risks, mostly related to the stress in the euro zone,” said Fed President William Dudley, in a prepared speech. “While there are some bright spots in the U.S. economy and the financial system, strong headwinds are preventing a more vigorous recovery.”
On the Agenda
The Business Council of Fairfield County”™s “National Economic Outlook and Regional Forecast” is scheduled for Jan. 12 at the Stamford Plaza Hotel & Conference Center. For information, email info@businessfairfield.com.
The Connecticut Business & Industry Association”™s “Economic Summit and Outlook 2012” is scheduled for Jan. 6 at the Marriott Hartford Downtown. For information, email lise.cliche@cbia.com.
