Most Connecticut businesses say their worst recession obstacle has been state lawmakers, who they say have hurt their ability stay competitive and profitable, a new survey finds.
And while there is talk of recovery, businesses believe Connecticut’s comeback will lag the nation’s, and will depend largely upon the strength of the small to midsize businesses that make up the state’s major industry sectors, according to the 2009 Connecticut Business & Industry Association/BlumShapiro survey.
National economic uncertainties represent the single greatest concern for most businesses (56 percent) followed by short-term business vitality (14 percent) and a tighter lending climate (10 percent). Less than half (42 percent) of businesses expect to record a net profit in 2009. That’s down from 62 percent in 2008.
“Connecticut businesses are struggling in this global recession,” said John R. Rathgeber, CBIA president and CEO. “Many have had to make difficult decisions in order to remain competitive and to position themselves for growth when the economy recovers. State policymakers can help by understanding the challenges that employers are facing and by making the tough decisions necessary to secure Connecticut ‘s economic vitality.”
Half of the businesses responding to the survey believe that the national economy will recover next year, and 30 percent expect it to happen in 2011. But they say Connecticut’s recovery will lag the nation’s: 38 percent anticipate a 2010 recovery in the state, and 35 percent said it will rebound in 2011. One quarter don’t expect a full statewide recovery until 2012 or later.
The survey also found the greatest challenge to operating a business in Connecticut remains the cost of doing business (65 percent) followed by diminishing profitability and loss of customer base at 20 percent. The majority of businesses, (60 percent) identified health care benefits as their single greatest cost concern.
Taxes continue to rank high on the list of challenges for businesses. The personal income tax was identified by 28 percent of respondents as the most burdensome, followed by real estate taxes (17 percent), corporate income tax (16 percent), unemployment compensation taxes (14 percent), the state sales and use tax (9 percent), and personal property taxes (8 percent).
“The state’s economy and business tax climate are largely dependent on each other,” said BlumShapiro Partner Jay M. Sattler. “Now more than ever, Connecticut business owners need to stay abreast of the proposed tax changes and voice their concerns to legislators.”
The majority of businesses (70 percent) believe the state legislature has negatively influenced their ability to operate a successful, profitable business in Connecticut. More than half of them (58 percent) have communicated their concerns to state and local legislators.
The survey was emailed to approximately 5,500 Connecticut businesses in June 2009. There were 707 completed surveys for a 13 percent response rate and margin of error of plus or minus 3.7 percent.
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Reader response:
“I totally agree with the survey, no surprises, I see small businesses closing every week. CT has become a state where the costs out weight the options complicated by the Banks not lending. Our State Reps and Senators do not always do what is best for the people they serve and we need to clean out and get fresh new faces who really work for the people.” — Patricia Bruhn, Pebbles GraphicsÂ
