Annual business survey captures challenging landscape
More than half of the nearly 1,000 Connecticut business executives who participated in an annual survey reported they either laid off employees, cut employees’ hours or imposed furloughs because of the COVID-19 pandemic and state government’s efforts to contain it, and less than half expect their companies to earn a profit this year.
Most, however, expect their job levels to remain stable over the next six months, with 20% predicting growth and 20% predicting a decline.
Such are the findings of the Connecticut Business and Industry Association’s 19th annual survey of state businesses, released Thursday, which the association undertook with the support of Marcum LLP, an accounting and advisory services firm.
The survey notes the year’s economic upheaval has caused far more damage in Connecticut than the 2008-10 recession, with 291,300 jobs lost in March and April alone — 17% of the state’s pre-pandemic workforce — more than double the 120,000 jobs lost during the earlier period.
More than 6,600 top executives were sent the survey, and 962 responded, a record high response rate of 14.5%, according to the CBIA. The survey has a margin of error of plus or minus 3%. More than three-quarters of the respondents represent small businesses that employ fewer than 50 people, and nearly a third of those who participated represent manufacturing companies.
Relatively few of the respondents lead companies with primary locations in eastern Connecticut. Most of the companies are in Hartford County (37%), New Haven County (27%) and Fairfield County (17%), while counties with the least representation include New London (4%), Tolland (3%) and Windham (2%).
Eighty-six percent of respondents were deemed “essential” businesses that were allowed to remain open after Gov. Ned Lamont ordered a mid-March shutdown amid the COVID-19 outbreak. Businesses that were required to remain closed until June and, in some cases, still are operating at less than full capacity “are struggling to survive, with implications for the state’s economy as a whole,” the survey says, referring to the leisure and hospitality, "other services" and retail trade sectors, which include restaurants, bars, hotels, entertainment facilities, gyms, hairdressers and salons.
A quarter of those who responded to the survey reported they made no changes to their workforce because of the pandemic. Twenty-three percent reduced employee hours, 18% implemented furloughs and 16% laid off workers. Six percent said they hired additional workers and 5% said they increased employee hours.
Eighty-six percent of the companies whose executives responded applied for loans under the federal Paycheck Protection Program, which was designed to help businesses keep their employees working through the pandemic. Of those companies that applied, 98% were approved for loans, and of those that accepted loans, 86% said they met their employee retention goals, the survey says.
More than half of the respondents indicated their employees could work remotely and that most of their employees continued to do so through July. They indicated more than a third of their employees will continue to work remotely for the foreseeable future.
While Connecticut has weathered the economic slump associated with the pandemic relatively well compared to other states, its current standing reflects its economy’s pre-pandemic weakness, the survey points out.
“Connecticut’s economy ranked 33rd nationally in 2019, expanding 1.6% after posting 0.5% growth the previous year — the only two years of growth since before the last recession hit in 2008. The economies of all New England states except Maine and Connecticut ranked in the top 20 last year,” it says.
The survey cites a Pew Charitable Trust finding that Connecticut’s average personal income has grown just 1.1% since 2007, better only than West Virginia, Illinois and Mississippi.
Only 47% of respondents expect their business to post a profit this year, while 28% anticipate losses and 25% expect to break even. A year ago, 77% of companies posted profits, 13% broke even and 11% sustained losses, according to the survey.
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