Continued Strong Economy Seen By Executives
Continued Strong Economy Seen By Executives
HARTFORD â Business executives expect Connecticutâs economy to remain strong in the next quarter, despite the recent rise in the cost of capital and the scarcity of workers to hire, according to the latest quarterly survey from the Connecticut Business & Industry Association.
âCompared to a year ago, business executives are slightly more optimistic about both Connecticutâs and our nationâs economy,â said Andrea Doane, a research analyst for CBIA. âWe also see stability in business executivesâ outlooks for their own companies, despite the rising wage and benefit costs.â
According to the survey, 48 percent of the 466 respondents said they see their companyâs performance remaining stable for the fourth-quarter 1999, while 40 percent said they see their companyâs performance improving.
More than 43 percent of respondents said they expect their wage costs to increase either somewhat or significantly and more than 35 percent said they expect their benefit costs to increase as well.
âWhile companies are struggling with domestic labor costs, exports are projected to remain strong through the next quarter,â said Ms Doane.
Ninety-five percent expect their exports to increase or remain stable, while 33 percent said high domestic labor costs will negatively affect their ability to compete internationally, as compared to 28 percent last quarter, and 12 percent this time last year.
Over the past three months, Federal Reserve actions have caused banks to raise interest rates. As a result, 63 percent said that rising interest rates would have a slightly negative impact on their business, while 30 percent said an increase would have no impact.
âDespite the fact that the Fed did not take further action regarding interest rates when they met October 5, their past actions have impacted businesses,â said Doane. âThe rising cost of capital, however slight, can affect small and fledgling businesses who are operating on a very tight budget.â
CBIA is the stateâs largest business organization, with 10,000 member companies throughout Connecticut.