A state economy that continues to lag both the region and the nation is Connecticut business’s greatest concern, according to the latest annual survey by the state’s chief business lobby.
The 2014 Survey of Connecticut Businesses also found three times as many companies are growing as contracting here, and that businesses rank reducing taxes and regulations as higher priorities than government investments in transportation and other infrastructure.
The Connecticut Business and Industry Association, which produces the survey yearly in cooperation with the West Hartford accounting firm BlumShapiro, released the results Friday during a forum at the Sheraton Hartford South in Rocky Hill.
“Economic competitiveness is not just a business issue but one that touches every community, every neighborhood and every family in Connecticut,” said CBIA President John Rathgeber. “A competitive economic climate means more jobs, more opportunity and a brighter future for everyone in the state.”
“Our state is really at an economic crossroads,” said James P. Torgerson, president of United Illuminating, who spoke at Friday’s forum.
Connecticut’s economy since the last recession ended has grown at a rate roughly one-third that of nearby states, such as Massachusetts and Vermont, and well below the national average, Torgeson said, adding this hasn’t escaped the notice of businesses here.
Though Connecticut still offers good access to capital, a strong education system and an overall high quality of life, the hefty costs of living and doing business here, coupled with an aging, overcrowded transportation system generally drag down the Nutmeg State’s overall competitiveness, Torgeson said.
He cited two recent business competitiveness rankings – by CNBC and by Forbes magazine – that placed Connecticut 46th and 33rd, respectively, among all states.
The survey found 34 percent of businesses cited Connecticut’s economy as their greatest concern. Others concerns cited include:
- The national economy, 18 percent;
- Health care costs, 16 percent;
- Taxes, 11 percent;
- Cost of complying with regulations, 10 percent.
But while taxes were not among the top three concerns, lowering taxes was far-and-away the most popular step businesses want state officials to take.
The survey found 52 percent of businesses listed lowering taxes as their top priority for policymakers. Other priorities listed by respondents include:
- Reducing regulations, 24 percent;
- Cutting government spending, 11 percent;
- Increasing tax incentives for business investments in research, staffing and capital, 7 percent.
- And improving transportation and other public infrastructure, 6 percent.
Cutting the cost of doing business here would help companies invest more in their own priorities: technology, employee training and facilities, said Joseph Kask, office managing partner with BlumShapiro in West Hartford.
Peter Gioia, the CBIA’s senior economist, said state government should be able to both reduce taxes and increase investments in transportation over the long-term with better fiscal discipline, efficiency and planning.
But Gioia said that, in the short-term, businesses clearly have made tax cuts their top priority.
“Connecticut’s economy is still continuing to recover,” he said. “Problems we’ve had for several years are not going away.”
There were some positive signs in the survey.
It showed 35 percent of businesses are growing, compared with 11 percent contracting and 54 percent holding steady.
And 46 percent of businesses said they introduced new products over the last year, and 47 percent plan to introduce new ones in the next 12 months.
Just over 10 percent of the 4,562 businesses asked to participate in the survey submitted responses. Typical participation rates for this survey range from 7 to 10 percent, organizers said.