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1999: The Crystal Ball
State business leaders expect economic improvement as year unfolds, survey finds
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Business New Haven
1/11/1999
By: BNH
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Connecticut companies are bullish about 1999 as a whole, but not too sure about their prospects for the first quarter.
The latest survey by the Connecticut Business & Industry Association (CBIA) reveals that top state executives express uncertainty about global financial markets and cost concerns, leading to their short-term doubts.
However, their overall confidence about the year ahead is bolstered by a lack of concern about borrowing money. Overall, 76.7 percent of business leaders polled rank Connecticut's lending climate as good to excellent, with 22.1 percent characterizing it as just fair.
More than half of respondents (54.3 percent) predicted improved fortunes for their companies during 1999, while another 34.5 percent expect business to remain stable. Just 11.3 percent predicted a down year for their companies.
But with regard to the first three months of the year, just 35 percent anticipate improved business fortunes for their firms, down from 39 percent in the last quarter of 1998 and from 49 percent a year ago. Forty percent of respondents foresee the business climate to remain stable, while 26 percent expect some falloff in results.
On the other hand, more respondents than previously expect that the state's economy will continue to trend upward: 21 percent expect to see improvements in the economy, up from 12 percent in the previous quarter. Sixty-two percent foresee stability while 17 percent are pessimistic.
With regard to hiring activity, 19.5 percent of responding companies expect to hire new workers during the first three months of 1999, compared to 25.5 percent during the previous quarter.
The CBIA survey also shows that cost pressures are mounting for businesses in Connecticut, in particular costs associated with health-care coverage.
State executives are not on the whole upbeat about the national economy. Twenty-eight percent expect to see a decline in the nation's economic fortunes, while only 12 percent expect the U.S. economy to perform better. Sixty percent of respondents foresee no significant change in fortunes.
Conducted in early December, the CBIA survey attracted 268 respondents, a 13.5-percent response rate resulting in a margin of error of plus or minus six percent. BNH
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