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Taking the Temperature of Business
DECD begins tracking business confidence in state
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Business New Haven
11/29/1999
By: Michael C. Bingham
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State economic-development officials have begun regularly to monitor Connecticut's business climate in hopes of gaining a more accurate assessment of future expectations of the private sector.
To do so, the state's Department of Economic & Community Development (DECD) has retained the Center for Survey Research & Analysis (CSRA) at the University of Connecticut in Storrs. Results are based on 400 quarterly telephone interviews conducted with business executives across the state.
Begun at the beginning of 1999, the Connecticut Business Climate Index has five components:
• Future expectations for the job market;
• Confidence in the respondents' own business prospects;
• Future expectations for the economy;
• Present satisfaction with the economy: and
• Current assessment of the economy of a prosperity-to-depression scale.
DECD officials explain that the new index is intended to measure the overall strength of the state's economic climate, as well as to provide important information on individual sectors of the economy.
What sectors are those? Two-thirds of the businesses surveyed - about 11 percent of the total each - represent financial, health care, high technology, manufacturing, telecommunications and tourism/entertainment. The remaining 33 percent belong to different industries.
The surveyed group is also skewed toward small businesses. Fifty-eight percent have between one and four employees, 33 percent have between five and 50 workers and just nine percent have more than 50 employees.
So, what do they have to say? On a 100-point index scale, the index for the first quarter was 71.9, a result which compared favorably to all previous indices regarding the economy conducted by DECD. That number floated a bit higher for the second quarter, to 72.9. Respondents in June reflected a lower third-quarter index of 67.7 of 100. However, the fourth-quarter figure, released October 1, rebounded to 70.1
DECD officials see in those numbers a positive assessment on the part of the state's business community of Connecticut's and nation's economy. Seventy-nine percent of responding businesses said they were confident about their own prospects over the next few years. And two-thirds (67 percent) rated general business conditions in their area as good or excellent.
“This survey is about listening to our customers,” says DECD spokesman James Watson. “It is an effective tool for gauging businesses' expectations about the future, and helps us monitor Connecticut's business climate in general.”
- M.C.B.
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