Connecticut businesses are slightly more confident about the economy, but customers rising late payments are dampening their mood, a fresh Connecticut Business & Industry Association survey shows.
Nearly two-thirds (62 percent) of respondents said they are experiencing an increase in the number of customers making delinquent payments on new and existing accounts, the state’s biggest business lobby said.
More than half (51 percent) of them said the payments are 60 days overdue. Another 21 percent said payments are 30 days late, and 18 percent said payments are 90 days behind or later.
But businesses are reporting improvements for their own firms, and they expect that trend to continue. More than a quarter (27 percent) said their firms are growing, up from 18 percent in last quarter’s survey.
Twenty-nine percent said business has worsened, down from 33 percent last quarter. Twenty-two percent of respondents expect improvements in their industry to continue. That’s up from only 14 percent last quarter and 9 percent a year ago. Thirty-nine percent anticipate declines, down from 43 percent last quarter and 56 percent a year ago.
“The good news is business executives are reporting improvements and are optimistic about growth in their industries,” says CBIA economist Peter M. Gioia. “And while the economy’s downward slide appears to be slowing, the bad news is payments are being made late and credit is still tight. Until that turns around, we can expect more of the same.”
Business executives responding to the survey also reported improvement in production, sales, and productivity for their firms-key indicators of business growth. Twenty-eight percent reported increases in production/sales, up from 25 percent last quarter and 17 percent in the fourth quarter of 2008. The figures for productivity were slightly better, with a significant increase in the number of respondents (35 percent) reporting increased productivity numbers compared with last quarter (24 percent).
Gioia says the production, sales and productivity numbers have crept back to where they were before the September 2008 market meltdown. “While not great in historical context, these numbers show businesses are in the beginning stages of recovery from the worst recession since the Great Depression. We still have a long way to go,” said Gioia.
The survey also found increased optimism regarding the economy: 27 percent of respondents expect the national economy to improve, compared with 15 percent last quarter and only 7 percent a year ago. Regarding the state’s economy, 12 percent expect improvement, up from 8 percent last quarter and only 3 percent a year ago.
“We are growing steadily from the lows recorded at the beginning of the year, but we must have favorable credit conditions, a surge in overtime, and fewer unemployment claims before the economy fully rebounds and businesses start hiring again,” said Gioia.
A total of 346 business people responded to CBIA’s September poll, for a 13 percent response rate and a margin of error of plus or minus 5 percent.
