Survey: Majority of CT employers see business climate for expansion at a standstill

The climate in Connecticut for expanding a business is at a standstill with the state’s high cost of living and labor shortages among the biggest hurdles to growth, according to a new survey released Wednesday.

The Connecticut Business & Industry Association’s annual survey of state businesses found that 41% believe the state’s business climate is static, with 39% saying it is in decline. The survey of 2,800 businesses showed that just 8% of businesses believe the climate is improving.

“There’s significant demand for Connecticut products and services, and while job growth remains strong, the pace of growth is not fully meeting the demands of our economy,” said Chris DiPentima, president and chief executive of CBIA, the state’s largest business lobbying organization.

“We are promoting solutions to lower costs, reduce regulatory burdens and expand the labor force, and it’s critical that policymakers embrace them to accelerate job growth and create more opportunities for our residents,” DiPentima said, in a release.

Connecticut has 93,000 job openings — 33% more than before the COVID-19 pandemic — but, at the same time, the state’s labor force has declined by 23,000, or 1.2%, since February 2020.

“We have the jobs — what we need are the people to fill them,” DiPentima said.

Other key findings of the survey were:

• Almost nine in 10 surveyed firms say the cost of doing business is increasing, citing labor costs, goods and supplies and state taxes.
• 78% report difficulty finding and retaining workers and 46% list employee recruitment and retention as their top investment priority.
• 60% say the availability of affordable, quality childcare is important for recruiting and retaining talent.
• 73% of businesses reported profits in 2023, down three points from 2022, with 13% breaking even and 14% posting losses.
• 28% expect to grow their workforce in the next six months and 8% expect a decline.

The survey was conducted jointly with Marcum LLP, an accounting and business advisory firm, with survey forms mailed and emailed between June 11 and July 18.

The majority of those that responded — 78% — were small businesses with less than 100 employees. That group was followed by 8% employing 100 to 249 workers, 2% having 250 to 499 employees and 2% with more than 500 employees.

Of the 2,800 survey forms that were distributed, 14%, or nearly 400, were returned. The margin of error is 2%.

Kenneth R. Gosselin can be reached at kgosselin@courant.com .