It is not just the 2009 economy that is giving local businesses headaches ”“ a new poll shows they still are feeling the lingering hangover from Fairfield County”™s high cost of doing business.
Just one in five Fairfield County executives expressed optimism about the local economy in a freshly published survey from the Connecticut Business and Industry Association (CBIA), though only about half expressed a pessimistic outlook for their own businesses this year.
Perhaps incredibly, whereas 39 percent of business owners indicated they view the economy as the greatest challenge to operating a business in Fairfield County, nearly as many ”“ 35 percent ”“ said their biggest hurdle continues to be the high cost of doing business as reflected in health care premiums, energy rates, taxes, workers”™ compensation and other costs.
If the former response provides an assurance that six in 10 businesses do not feel the economy is their most immediate threat, the latter provides yet another reminder of the complaints a sizeable number of businesses have with perceived obstacles to growth and profitability. The Connecticut General Assembly commenced its two-year legislative session last week, with closing looming budget deficits the top priority.
“If the cost of doing business wasn”™t that bad, perhaps the economic downturn wouldn”™t be so terrible,” said Peter Gioia, vice president and economist of CBIA. “There”™s not a whole heck of a lot (state) government can do about the overall economy, but there”™s a whole hell of a lot they can do about the cost of doing business.”
Gioia said the gloom among business owners has if anything worsened since CBIA conducted its survey of local businesses included with this week”™s edition of the Fairfield County Business Journal, culled from 450 local responses to a statewide poll last fall following the banking bailout. If there has been one bright spot, he said, it is that many businesses appear to be considering making acquisitions, which provide an escape hatch for some companies lacking the capital to stay in business, while preserving at least some of the jobs that might otherwise be lost.
“I don”™t think there were any surprises,” said Jack Condlin, CEO of the Stamford Chamber of Commerce, which partnered in producing the survey. “We ”¦ are dealing with economic times that we have never experienced before.”
The survey was sponsored by BlumShapiro and TD Banknorth, and other survey partners included the Business Council of Fairfield County and the Greater Norwalk Chamber of Commerce.
More than a third of county businesses polled said they have direct ties to the financial services sector, which drives much of Fairfield County”™s contributions to the state economy. Nearly half the companies polled had 10 or fewer employees.
While the high cost of business locally remains a sticking point with businesses, the economy clearly has shoved other issues onto the backburner. In a prior survey published in 2006, 29 percent of respondents cited transportation and infrastructure as the biggest challenge to doing business locally. In the latest survey, just 8 percent of those surveyed said likewise, with expanding mass transit and highway capacity the top priorities for respondents.
The structural changes needed in the state go far beyond concrete and steel, Gioia said, extending to sound fiscal policy and reducing financial and regulatory burdens on businesses.
The overriding question for many economists has been whether Fairfield County and by extension Connecticut will have a slower recovery from the recession due to the region”™s close ties with New York-based financial companies.
Slightly more than half of those polled by CBIA predicted they would turn a profit this year, down from 62 percent in 2008. Asked whether the federal bailout was improving access to credit, nearly half stated it was having a moderate or strong impact on their ability to secure loans.
