Business warily waits for the special session on jobs

ROCKY HILL–Gov. Dannel P. Malloy offered an optimistic take in Hartford on the struggling construction industry Thursday, but the outlook for the broader state economy was mixed, at best, at an annual business conference a few miles away.

The 10th annual survey of businesses by the Connecticut Business and Industry Association found hiring and profits up, but deep concerns about the national economy, state tax increases and consumer uncertainty as Malloy prepared to call legislators into a special session on jobs.

“I’ll be honest, this year the results are a mixed bag,” said Janet M. Prisloe, a partner in BlumShapiro, the accounting firm that co-sponsors the survey.

The survey, which was presented at CBIA’s 20th annual conference on the Connecticut economy in Rocky Hill, is well-timed, coming a month before Malloy is to present economic development initiatives in a special legislative session.

“The bottom line is restoring confidence,” said Joseph Brennan, CBIA’s senior vice president for government affairs.

Brennan told the audience that he is encouraged that administration officials have  told him they are looking at the session as the kickoff of a continuing effort to change the business climate.

“I think that is their desire. They want to show Connecticut has changed,” Brennan said.

Relatively positive assessments of companies’ expectations for their own performance were tempered by what the survey report described as “deep frustration with Connecticut’s overall business environment.”

“This survey is a call for policymakers to change those perceptions by taking positive actions,” the report said. “The fall special General Assembly session on jobs called by Gov. Dannel P. Malloy is a good place to start.”

More companies are planning to hire, but manufacturers and some others reported difficulty in finding qualified workers, despite an unemployment rate that’s hovered around 9 percent for months.

Connecticut’s educated workforce was seen as major asset by half the respondents, but 37 percent say finding workers has been difficult, indicating a mismatch between skill sets and available jobs.

Companies complained about taxes and the general business climate, but demographics were an even larger concern.

“An overwhelming majority of respondents (85 percent) worry about the state’s slow population growth and outmigration of 21-to-45-year-olds. Fully 51 percent characterize themselves as ‘very concerned’ about these demographic trends,” according to the survey report.

The state’s business climate was ranked poorly, when respondents were asked to compare the state to nine competitor states.

Only 19 percent ranked it as in the top three, while 63 percent placed it in the bottom three.

Christopher Steele, a consultant who studies competitiveness, said he found little value in an oft-quoted survey by Chief Executive magazine that ranked Connecticut’s business climate as 44th among the 50 states.

The survey comes with no analysis about specifics, but Steele says it cannot be ignored, since the perception can color boardroom discussions about expansion.

“It is something you have to pay attention to,” Steele said.

Steele said other data were more encouraging, such as Connecticut’s ranking in the top five when it comes to production efficiency in manufacturing, which remains an important sector of the state economy.

“This is not news that goes out in the press on a regular basis,” he said. “Perhaps it should.”

Brennan said Connecticut always will show high on productivity scales, because the remaining manufacturing base tends to be high-precision. Low-cost manufacturing have long fled the state, he said.

Only 17 percent of companies surveyed were optimistic that Connecticut will overcome its economic problems over the next five years. Sixty-three percent were pessimistic and 20 percent unsure.

Respondents want to see the size of government shrink and regulations be eased.

Brennan said that CBIA has had major policy differences with Malloy, but he complimented the governor for appointing agency heads who see nurturing businesses as a core function.

“He’s brought in people that are really balanced and serious about what they do,” Brennan said. “We’re really seeing a change in the mindset.”

In Hartford, Malloy attended a press conference that projected a five-year turnaround in the construction industry, in large part because of public-sector projects such as the Hartford-New Britain Busway and an expansion at the UConn Health Center.

“We’ve got to be committed to getting the state of Connecticut moving again, moving rapidly,” Malloy said during a mid-morning public event at Union Station in Hartford.

Connecticut’s construction industry is facing some of the highest unemployment rates in the state, the governor said, adding that architects, engineers and skilled tradesmen “have suffered perhaps the most in this downturn.”

The governor announced his administration would invest $425,000 in the Jobs Funnel program, a pre-employment preparation, job training and placement service centered on the Greater Hartford area. Portions of a $5.8 million federal grant awarded in June would be dedicated to the program as well.

Malloy said that since taking office in January, he has used most of the state’s bonding capacity to finance projects that would help create construction jobs, adding that he expects the $864 million expansion of the University of Connecticut health center in Farmington, the busway, and an “aggressive” commitment to affordable housing construction will stimulate major job growth in the coming years.

Besides these large initiatives, Malloy said his administration would continue to look for construction programs to back with an emphasis on “those projects that are truly, truly shovel-ready,” adding this means work that is set to begin in a matter of months, not years.

“We are moving projects along… at breakneck speed,” he added.

A new report by Capital Workforce Partners, a state-funded, workforce development consortium of municipal and state officials and private business leaders, estimated that more than $5 billion in public and private funds would be pumped into construction work in North Central Connecticut over the next five years with the heaviest concentration of new jobs created in Hartford, East Hartford, New Britain, Bristol, Canton and Simsbury.