Connecticut businesses continue to feel unease about the national and state economies despite rising profitability for many of them, a new Connecticut Business & Industry Association survey shows.
The good news is that for the second straight quarter exports are strong and leading to increased profits for many businesses, according to the 2011 CBIA/Farmington Bank Credit Survey.
“The survey clearly reflects a softening in the economy over the last quarter,” says CBIA Vice President and Economist Peter Gioia. “That, combined with concern over the debt ceiling debate in Washington, has led to a downturn in business confidence and a significant uptick in firms experiencing problems obtaining credit.”
More than a quarter (28 percent) of survey respondents said that credit availability is a problem for their companies-up from 21 percent last quarter and the highest percentage in more than a year.
Only 9 percent of business executives responding rated current conditions good or excellent, down from 10 percent last quarter. More than half (55 percent) said current conditions are poor or fair, the highest reading in more than a year.
More than half of respondents (52 percent) expect conditions to worsen over the next three months (July-September). Only 8 percent said that credit availability going forward will get better, down from 14 percent last quarter and the lowest number in more than a year.
“With greater economic uncertainty looming and mounting pressure on 2011 profit margins, credit becomes even more critical to small businesses,” says John Patrick, president and CEO of Farmington Bank. “And credit availability is especially important today because national fiscal and monetary policies, which usually help advance U.S. growth, may not be able to provide the stimulus needed to move the economy forward.”
