As Gov. Dannel P. Malloy and legislators prepared for next week’s special session on jobs and the economy, the Connecticut Business & Industry Association released a survey Monday estimating that barely half of businesses in Fairfield County expect to turn a profit this year.
“It’s certainly the single strongest county in the state,” said Peter Gioia, vice president and chief economist of CBIA. “On one hand we’re concerned that profits are low, but there’s still confidence in economic outlook.”
The survey said about 53 percent of Fairfield County businesses expect to turn a profit, compared to an estimated 60 percent in 2010. Despite low and worsening profitability, 38 percent of those surveyed said they expect their businesses to improve and 40 percent think their business will remain stable.
“Those positive numbers have got to be noted,” Gioia said.
CBIA, the Stamford Chamber of Commerce, TD Bank and accounting firm BlumShapiro to produce the survey. About 195 Fairfield County businesses completed the survey via e-mail, leaving a margin of error of +/- 7.1 percent. The businesses fell in a wide range of industries, including professional services, manufacturing, finance, insurance, real estate, construction, health care and technology.
The profitability estimates in Fairfield County reflect a faltering statewide economic climate that Malloy hopes to address through a bipartisan special session, but the governor warns there are no quick fixes.
“You’re not going to see instantaneous results,” Malloy said last month. “This is about changing the climate, and we’re going to do that.”
Gioia said the numbers concerning him most reflect Fairfield County’s lack of confidence in government.
The survey said 43 percent of Fairfield businesses in 2009 agreed or strongly agreed that local and state taxes were reasonable, whereas just 15 percent feel that way today. Only 7 percent felt their state tax dollars are used effectively and that Fairfield County benefits from state spending as much as any other county. Seventy-four percent of those surveyed said they felt government makes it harder for their businesses to succeed.
“I think these are the most sobering numbers,” Gioia said. “I’m hopeful that the special session will be productive. So far, it’s only verbiage. They’re going to have to present a solid bipartisan front and promise they’re not going to do anything to hurt businesses. They’re going to need to take some concrete steps.”
Businesses in other Connecticut counties recently echoed this lack of confidence in government, as well. Small business owners vented at a two hour-long October 12 forum hosted by the House Republican Caucus.
The survey recommends that legislators help restore confidence by sticking to a strict $20.14 billion budget, which falls just $1 million below the constitutional spending cap. Compare that $1 million with $329.2 million in General Fund cost overruns that state agencies reported last year and that task could prove difficult.
It also suggests that Malloy and the legislature follow through on using the next legislative session to focus on education reform to ensure the creation of a well-educated, skilled workforce.
“Compared with the rest of the state, there are problems finding trained, skilled workers in Fairfield County,” Gioia said.
The survey said 41 percent of businesses felt that skilled workers weren’t readily available, 7 percent felt they weren’t available at all and 25 percent felt they were only somewhat available. Despite a lack of access to skilled workers, 31 percent of businesses still plan to expand in the next five years through a number of strategies, including new products, services and investments in research and development.
Fifty-one percent of businesses felt that cost served as the biggest barrier to expansion, including taxes and regulations. About 39 percent felt competition and a lack of customers most impeded expansion and 21 percent felt it was a continued lack of capital or financing.
Respondents also felt another challenge to operating a business in Fairfield County falls on the region’s transportation infrastructure. Forty-three percent of those who thought infrastructure posed a problem felt making improvements to I-95, including expanding highway capacity by adding lanes, would relieve some of the transportation and infrastructure problems. Another popular solution was expanding the state’s rail system.