October 14, 2016
According to a recent study by the Connecticut Business & Industry Association and BlumShapiro, over two thirds of state businesses showed a profit in 2015, which is a 10-year high. However, the same study shows that half of those same businesses do not plan on making investments within the state.
The 2016 Survey of Connecticut Businesses examines near-term outlook, export activities, workforce trends, technology investments, and legislative priorities. Businesses overwhelmingly expressed concerns with the volatile and unstable climate in state government.
The survey showed that despite a slow economy and modest job growth, 68 percent of businesses recorded a profit in 2015, levels not seen since prior to the 2008 recession. However, 15 percent of businesses recorded a net loss, which is the same level as 2015 and down from 20 percent in 2011. More than a quarter (26 percent) say their company is considering shifting production or operations to another state within the next five years, and 31 percent are looking to set up new facilities outside the state.
The state has yet to recover 100 percent of the jobs lost in the recession, and job creation by young companies has failed to return to pre-recession levels.
Connecticut businesses see most of their hiring in 2016 centered on entry-level jobs (34 percent view this as the area of greatest demand for new hires). Population trends — negligible growth, looming retirements, and high domestic out-migration — are also reshaping Connecticut’s workforce. Surveyed businesses anticipate losing 2.6 percent of their workforce to retirement this year, and over the next five years expect to replace about 16 percent of their current workers.
Young Talent Might Be Leaving
Most survey respondents believe Connecticut students who attend college outside the state are likely to remain out-of-state rather than returning home to work. Connecticut has the added problem of students finishing school here but seeing greater opportunities for jobs, recreation, and affordable housing elsewhere.
For local entrepreneurs looking to create their startups within the state, an exodus of young talent may cause an issue with long-term development. Fortunately, the state has a history of leading the nation in innovation.
Connecticut has long been one of the nation’s leaders in key categories that underpin a state’s economic competitiveness—the strength of its workforce, education system, base industries, and R&D. From Joe Brennan, CBIA CEO and president:
“This survey shows that fiscal stability and predictability are keys to restoring business confidence in the state, which will lead to much-needed job-creating investments.”
For more information on the survey, read the CBIA report.
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