Latest Survey Shows Positive Signs, Strong Need for State and Business Community to Work TogetherOctober 29, 2015
Andrew S. Lattimer, CPA, MST, Partner
The recently released 2015 Survey of Connecticut Businesses, compiled annually by the Connecticut Business and Industry Association (CBIA) and BlumShapiro, provided an interesting snapshot of the current state of business in Connecticut, a snapshot provided by Connecticut’s businesses themselves.
The survey, by and large, presents good news—it is evident that Connecticut’s economy continues to improve, particularly when compared to the depths of the recession back in 2009. Perhaps the largest indicator of this continued recovery is business profitability—not since 2006 have we seen so many businesses (63% according to this survey) showing a profit. Additionally, the climate in which to do business is as stable as it’s been since the pre-recession days; more than four out of every five businesses surveyed indicate they are either expanding or holding steady.
Business exports continue on a positive trajectory as well, with more businesses attributing a larger number of their sales to exports. This is all good news moving forward. However, the relationship between Connecticut’s state government and its business community remains an issue on the minds of many of those surveyed.
This has been a challenge in Connecticut for several years. The consensus in 2015 is there is a need for state lawmakers to engage business leaders to create a more business-friendly climate in Connecticut. A better dialogue between state leaders and business leaders, particularly on taxes and competitiveness, is a clear path to a positive future.
The numbers make it clear that, just as Connecticut has much to be optimistic about with the economy, work needs to be done to improve the relationship between policy-makers and businesses. In this survey, 91% of respondents say Connecticut’s business friendliness is worse than other parts of the country outside the northeast.
Businesses also agree that taxes remain a primary area of focus, with just under half of them identifying taxes as the biggest concern, and more than half indicating that reducing taxes is the best way to enhance business competitiveness. That said, the fact that businesses continue to grow and turn a profit in spite of these challenges is a testament to their ability to rise above the state’s public policy and economic shortcomings. That, too, is a reason for optimism.
Lastly, one fascinating finding in this year’s survey has to do with the readiness of businesses to transition to either the next generation or to new ownership. As Baby Boomers reach retirement age and will continue to do so for the next ten years, more companies than ever will be planning a transition during that time, yet most of them do not, as of yet, have a plan in place to address it. Of the businesses surveyed, 76% indicated they have not yet begun to create a succession plan. The time for businesses to start planning for a transition is right now, years in advance, to ensure continuity of the business, future profitability and jobs.
Overall, the signs continue to point towards a full recovery from the dark days of 2009. With a commitment from state leaders to work more with the business community in shaping economic policy, the future could look even brighter.
To download survey results, click here.
Andrew S. Lattimer, CPA, MST, is a tax partner with BlumShapiro, the largest regional business advisory firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm offers a diversity of services that includes auditing, accounting, tax and business advisory services. In addition, BlumShapiro provides a variety of specialized consulting services such as succession and estate planning, business technology services, employee benefit plan audits and litigation support and valuation. The firm serves a wide range of privately held companies, government and non-profit organizations and provides non-audit services for publicly traded companies.