The state”™s economic recovery remains sluggish according to the Connecticut Business & Industry Association”™s latest quarterly survey, as national and global issues continue to impact productivity and sales forecasts.
After seeing a steep drop in economic expectations in the second quarter of 2011, companies now report a slight increase in positive expectations for future quarters. While business leaders continue to be cautious, some positive trends have emerged.
There”™s no doubt this has been a rough year. Businesses are watching what”™s happening with legislative gridlock in Washington and with the debt crisis in Europe and they are concerned about the long road ahead.
Almost half (48 percent) of respondents to our latest survey felt the state economy would remain stable or improve, compared with just 27 percent in the second quarter. Just 9 percent forecast a significant worsening, down from 19 percent the previous quarter.
Confidence in the national economy remains flat, with 10 percent of respondents expecting some improvement (against 11 percent last quarter) and 43 percent saying it will remain stable (41 percent).
However, 47 percent expected the national economic situation to worsen, flat with the second quarter, while reflecting a more pessimistic mood than the third quarter of 2010, when 28 percent expected a decline and 24 percent forecast improvement.
Contrast that with New Jersey, where a recent New Jersey Business & Industry Association survey found business confidence in the U.S. economy at a 20-year low.
As for industry outlook, 23 percent of those surveyed expected that conditions will improve within their own sector, compared with 19 percent in the second quarter. Third-quarter economic survey key performance indicators:
- 35 percent of businesses expected increased production and sales for the next quarter, consistent with second-quarter findings.
- The percentage of respondents expecting increased productivity fell 7 percent to 29 percent in the third quarter.
- 17 percent expected productivity to decrease in future quarters, up from 11 percent in the previous quarter.
The survey was completed prior to the October special session of the General Assembly and passage of the bipartisan jobs bill. Any sense of optimism in the survey results could be linked to expectations surrounding that pending special session.
CBIA released the survey results about the same time as the state”™s October jobs numbers were published. That report showed a second consecutive month of job growth, although the Connecticut Department of Labor believed many of those jobs were temporary, attributing them to restoration efforts following tropical Storm Irene.
While the addition of 6,500 jobs in October is good news, it should be remembered that for year-over-year, we”™ve only added 10,100 jobs in total. We still have an awful long way to go to account for the 119,000 jobs lost in the recession.
Peter Gioia is an economist with the Connecticut Business and Industry Association. Reach him at pete.gioia@cbia.com.
