A survey conducted by Jones Lang LaSalle (JLL) and the Business Council of Fairfield County, titled “The 2014 Fairfield County Business Climate Survey,” revealed 64 percent of respondents see a favorable climate for their particular industry while 68 percent believe their industry is growing.
Survey responses were mostly optimistic, but participants indicated challenges remain. Access to talent was cited as the No. 1 challenge in the county, while 25 percent pointed to cost of living as a major consideration.
“One of the most valuable aspects of the survey was the ability to hone in on the companies within Fairfield County and assess their perception of the local market environment ”” regardless of whether they have offices or headquarters elsewhere,” said Erin Patterson, JLL”™s research manager for Connecticut and Westchester County, N.Y. “To gain insight into the aspects of the local market that allow businesses to be successful, as well as the challenges that hinder local businesses, is a tool that can be harnessed by a variety of stakeholders in Fairfield County.”
“The purpose of this survey was to gain some insight into the business community”™s outlook for their various industries and for the region as a whole,” said Robert Ageloff, international director and head of JLL”™s Connecticut/Westchester office. “Business sentiment is largely positive, indicating the potential for additional economic advancement and increased activity in the real estate sector.”
The report found:
Approximately 74 percent of respondents saw the overall business climate in Fairfield County as neutral, with minimal growth anticipated but little danger of the local economy retracting. Regarding their respective industries, however, about 64 percent of participants thought the climate for their specific industry was favorable and around 68 percent believed their industry was growing. In addition, more than 75 percent of respondents said their companies are in growth mode.
In terms of company plans over the next year, 70 percent of respondents said their firms are planning growth; 26 percent will maintain the status quo; and 4 percent expect to contract. Approximately one-third of survey respondents expect their company”™s space needs will increase over the next year. Around 55 percent of participants projected an increase in headcount, while 45 percent saw no change.
Most survey participants were pleased with the value of their current space. More than half, about 57 percent, thought their office space was efficiently used, while 24 percent believed their space was under capacity; 19 percent thought it was over capacity.
At least half of the respondents thought they were paying market rates for their space, while 23 percent believed it was over market and 27 percent saw it as under market. About 59 percent of participants thought office rents were unchanged from one year ago while 41 percent saw it as higher.
According to survey respondents, health care and education services firms claimed approximately 34 percent of activity, with financial services taking 25 percent and media, marketing and advertising firms accounting for another 11 percent.
Around 42 percent of participants saw lease expirations as driving activity, with 26 percent pointing to access to transportation and 20 percent to consolidation or downsizing efforts. Just 4 percent of respondents saw expansion driving activity.
Most of the survey participants were more optimistic about the outlook for Fairfield County”™s central business district (CBD) markets than its suburban markets.
Approximately 58 percent of respondents saw CBD asking rents increasing over the next 12 months, with 38 percent predicting no growth and 4 percent foreseeing lower rents. Around 11 percent saw suburban rents increasing, with 74 percent predicting no growth and 15 percent expecting lower rents.
In terms of vacancy rates, 44 percent of participants predicted no change in Fairfield County”™s CBD markets, while 48 percent saw a decline and around 7 percent expected an increase in vacancies. About 19 percent of respondents saw suburban vacancy rates as increasing, with 65 percent predicting no change and 15 percent expecting lower vacancy rates.
