New information shows federal reform hurting Connecticut businesses and preventing hiring. ?According to a recent Connecticut Business and Industry Association economic survey, slow growth and uncertainty are the major issues stemming from business leaders”™ concerns about health care and financial reforms.
“This uncertainty is at the core of the difficulties Connecticut businesses are having when it comes to making investments and hiring,” said Peter Gioia, vice president and economist with the Connecticut Business and Industry Association. “Businesses are unsure about new regulations and laws that could adversely affect their companies, making them reluctant to take risks, invest in their companies and hire new employees.”
The survey found that the possibility of expiring tax cuts is also negatively affecting the futures of Connecticut businesses. More than two-thirds of business respondents said the uncertainties associated with federal reform are hurting their ability to grow their companies and hire new workers.
The national unemployment rate as of October of this year is 9.3 percent, according to the U.S. Department of Labor”™s Bureau of Labor Statistics. Connecticut”™s unemployment rate was slightly lower, around 8.8 percent. Bureau of Labor Statistics found that the only positive change in employment figures in specific privately owned supersectors between 2009 and 2010 in Fairfield County were in mining and natural resources, which raised by 22 percent, and education and health services, which had a minuscule rise of 0.2 percent. All other industries showed an overall drop, with construction the lowest ”“ falling 20 percent.
The survey found that business respondents are not much more optimistic about improving state and national economies with 24 percent expecting improvement in the national economy, up from 20 percent in the second-quarter but down from 27 percent one year ago. More than a quarter expect conditions to worsen, down from 53 percent in the second-quarter and one year ago.
“We”™ve officially been out of the recession since June 2009, and many economic indicators are slowly improving,” said Gioia. “But people aren”™t directly feeling the improvements.”
Gioia said businesses aren”™t responding to hopes and will remain explicitly concerned until businesses begin growing and hiring again.”
In regards to the state, 11 percent of business leaders expect the economy to improve, the same as last quarter, but down from a high of 23 percent in the first-quarter 2010. About 47 percent of respondents expected the economy to worsen, down from 50 percent in the second-quarter and 57 percent one year ago.
“Business executives are not optimistic about the slow, incremental growth of the economy,” said Gioia. “But the bright spot is that employment increases are up slightly, while decreases are down slightly with fewer unemployment claims reported. Most economists expect this trend to continue until 2011, when a pickup is expected.”
The survey noted there was some increased self-confidence over last year, one quarter of the respondents expect their firms to improve, up from 20 percent a year ago, but down from 40 percent in the first quarter of 2010.
In regards to new employment, 19 percent of business executives expect to increase their work force in the next quarter, up from 17 percent last quarter and 18 percent a year ago. Only 17 percent expect to cut their work force, down from 19 percent last quarter and 29 percent a year ago.
