Connecticut businesses don’t expect to fully recover from the recession until sometime in 2011 or 2012, dampening hopes that the state’s economy will turn around any time soon, according to a new survey Friday from the Connecticut Business & Industry Association.
Uncertainties in the national and state economies, Connecticut’s anticipated budget deficits, and the potential for tax increases are all major business concerns, but poor sales have topped the list as the single greatest challenge to operating a business in the state, CBIA’s 20 10 Survey of Connecticut Businesses said.
As a result, companies are continuing a trend of belt tightening, concentrating more on efficiencies than expansion.
“Business leaders believe that solving Connecticut’s pending budget crisis is the most critical issue facing our state,” said John R. Rathgeber, CBIA president and CEO. “Together, we must challenge the candidates in this fall’s election to explain how they will solve the state’s fiscal problems and attract the business investments that are needed to create jobs here.”
The survey, which was sponsored by BlumShapiro, was emailed to approximately 4,800 Connecticut businesses in June. There were 682 completed surveys for a 14 percent response rate and margin of error of plus or minus 2.6 percent.
Businesses are concerned about potential tax increases, and over the next 12 months those concerns are expected to escalate. Sixteen percent of respondents said tax hikes are their single greatest concern over the next three years, and 38 percent of respondents cited the personal income tax as the most significant tax concern related to doing business in Connecticut.
That was followed by the property tax on real estate (27 percent) and the corporate income tax (16 percent).
In a bit of good news, however, business respondents said their individual companies are faring better than their industry as a whole.
But only a quarter of respondents say current conditions for their business are good or excellent today, and just 31 percent expect them to improve in a year.
Most respondents (57 percent) say conditions are poor or fair now, and 38 percent expect they will remain that way 12 months from now.
Among the surveys other findings:
— Â Respondents feel even less confident about their industry, with only 13 percent describing current conditions as good or excellent and 65 percent as poor or fair. One year out, the numbers improve only slightly, with 18 percent expecting conditions to be good or excellent and more than half (52 percent) expecting conditions to be poor or fair.
— Only 10 percent of respondents expect their companies to recover from the recession this year. A third expect recovery sometime next year, while a quarter expect improvements in 2012. Another 22 percent said recovery will come sometime after 2012. But nearly half (48 percent) said they expect to hire full-time employees.
— In 2009, slightly more than half of businesses surveyed record a net profit. More than a third (35 percent) recorded a net loss, while 14 percent broke even.
