As Connecticut’s economy continues to face a complex mix of challenges — ranging from rising operating costs, to difficulty filling jobs, affordability concerns and the state’s high cost of living — national and state policy changes are adding additional uncertainty to the mix, according to a new survey of businesses released on Wednesday. 

In the latest edition of the “Survey of Connecticut Businesses,” an annual survey compiled by the Connecticut Business and Industry Association, businesses across the state weighed in on a variety of topics — including federal tariff policy, the impacts of state regulation and taxes, and Connecticut’s overall business climate. 

“Employers are increasingly dealing with unnecessary uncertainty generated by both federal and state policy decisions, particularly tariffs and the pivot by Connecticut policymakers away from the fiscal guardrails and no-tax policies that brought much-needed economic stability in recent years,” Chris DiPentima, the president and CEO of CBIA, said in a statement released alongside the survey. 

“While our survey shows some signs of optimism, concerns about the state’s competitiveness, workforce challenges, and cost pressures continue to temper expectations,” he added. 

The survey was sent to 2,800 businesses across the state during the summer, with roughly 13% of businesses responding to the survey. Most of the firms were small, CBIA said, “with 68% employing less than 50 people, 13% with 50 to 99 people, 11% between 100 and 249 employees, and 8% employing between 250 and 499 people.” Overall, the report found that business opinions are widespread and are fairly consistent with the survey responses reported last year.

What was different in 2025, however, was a growing sense of unease and uncertainty amid policy shifts at the local, national and international levels — specifically the onset of new state regulations and global tariff and trade policies. 

[RELATED: A US tariff exemption for small orders is ending. It’s a big deal for CT small businesses]

That instability, respondents noted in the survey, arrives as businesses face persistent workforce difficulties, increased expenses and frustrations with state lawmakers. But the survey also found some business leaders in the state are seeing positive signs as well, focusing on innovation and optimization as the uncertainty continues.

That duality was on display Wednesday at CBIA’s annual Connecticut Economy conference, as business leaders and economic experts unpacked the survey results, describing the current political landscape as presenting both risks and rewards. 

“Don’t count on the uncertainty going away,” Ezra Greenberg, a partner with McKinsey & Company, said while presenting regional and national economic data at the conference Wednesday morning. “We’ve been talking about this for years, so we have to think about it.”

Costs are rising, for workers and for businesses

According to the survey, Connecticut businesses are dealing with two problems in particular: an increase in business costs and a shortage of workers.

In July, there were more than 77,000 unfilled job openings in the state — more vacancies than before the pandemic began in March 2020. 

Some 9 in 10 respondents also said that costs were increasing for a number of reasons, including labor expenses, health care, energy, taxes and compliance costs. 

Those costs make it harder for businesses to continue operating, they said, with one respondent arguing that “raising the minimum wage, workers’ compensation costs, and increasing the threshold on unemployment costs will ultimately make it unaffordable to stay in Connecticut.” 

Some respondents said policy decisions from the Connecticut legislature aggravated these difficulties. The report noted that respondents largely held neutral or negative opinions about the state Legislature when it comes to lawmakers’ handling of the economy. 

That led to a swift rebuke by GOP state senators Stephen Harding, Henri Martin and Heather Somers.

“Connecticut job creators are very concerned about what they see happening at our State Capitol, and rightly so,” the lawmakers noted in a statement released Wednesday. “Connecticut Democrats continue to overtax working families and businesses.” 

Survey respondents’ view on the issue went deeper than taxes. On a question about regulatory burdens, 45% of respondents said that Connecticut labor policies like paid sick leave and paid FMLA requirements were their biggest challenge. Another 23% cited insurance mandates and difficulty managing health care costs. 

[RELATED: CT paid sick leave law 2024: What to know about the expansion]

“Business leaders are navigating a complex cost landscape that directly impacts their ability to grow and compete,” the survey report noted. “At the same time, employers understand the rising costs their employees face to live in the state — leading them to find ways to increase salaries and offer other means of supporting their workforces.” 

That tension has been outlined in other recent reports.

In July, CT Voices for Children released a report arguing that addressing wage inequality — in other words, closing gaps in pay experienced largely by women, Black workers, and Hispanic workers — could help address affordability issues in the state. On Wednesday, Gov. Ned Lamont announced that Connecticut’s indexed minimum wage will increase to $16.94 in January 2026, one of the highest in the nation. 

Economic experts said Wednesday that if Connecticut hopes to be competitive regionally and nationally, it will need to find a way to thread the needle between businesses wanting lower costs and workers pushing for higher wages. 

“When you’re talking about quality of life, it’s not just quality of life, it’s for whom is the quality of life,” said Dustin Nord, director of the CBIA foundation for Economic Growth and Opportunity. “What are we doing to make it affordable for people that are at the beginning of their career, that they have opportunity and the ability to afford a nice place to live and have the amenities that they might be able to get in Charlotte, or if they go to D.C. or go to Virginia?” 

A regional – and national – competition

Wednesday also saw the release of a new CBIA foundation index comparing economic conditions in Connecticut to states across the country. 

The index report found that Connecticut is a mixed bag, ranking near the top of the nation on some measures like per capita personal income (2nd), and bachelor degree attainment (6th). But the state ranks close to the bottom on others, including job creation, where the state ranked 34th in one-year employment growth and 42nd for growth over a ten-year period. 

The ranking showed that Connecticut is struggling to keep up with more affordable states, making it harder for the state to attract new residents, keep young people after college, and support working families.

[RELATED: Does Gen Z want to live in CT after graduation? We asked.]

“The data reveals a state at an inflection point,” an introduction to the index report stated. “We have the educational attainment, research capacity, and income levels that typically drive economic success, and yet we’re not seeing that translate into the job creation and business formation that sustain long-term competitiveness.” 

On Wednesday, those gathered for the CBIA event acknowledged that the state is still in the process of charting its path forward. But for businesses, speakers said, at a time of heightened uncertainty and continued costs, finding support within the community will be key to moving forward.

“I think in these trying economic times, it is a time where businesses have to work together, where you have to partner,” said Robyn Sullivan, president of data recovery and cloud computing provider, Cloudsmart LLC. “There is some common ground that can be made.”