Connecticut's already poor credit conditions deteriorated between April 1 and June 30, according to the " /files/">Second Quarter 2012 CBIA/Farmington Bank Credit Availability Survey, surrendering first-quarter gains.
"With economic "/files//#valium_generic">valium generic waning, demand for credit has slackened as well. This lies "/books/buyxanaxonline//#here">here sharp contrast to what we saw earlier in the year when expectations for expansion were more favorable," said CBIA economist Peter Gioia.
"It was hoped that the prospects for rising profits would boost business lending, thereby further reducing the risk of another downturn in the 2012-13 timeframe, but despite record-low interest rates, credit demand remains rather lackluster."
The survey showed that only 15 percent of respondents saw future credit conditions improving in the near term, while 43 percent thought future credit conditions would remain effectively unchanged. About 41 percent believed near-term credit conditions were likely to deteriorate in the months to come.
"Economic recovery in the middle part of the year has clearly become more tenuous given the slowdown in real GDP growth, modest job gains, and scaled-back plans for expansion within the manufacturing sector," said John Patrick, president and CEO of Farmington Bank.
"Although the slow economy means reduced demand for credit, the good news is that current credit availability readings are up considerably from one year ago and so the basic uptrend in overall credit conditions remains intact for the time being."
Most economists have asserted that credit availability was crucial to sustained economic growth and therefore expected to play a pivotal role in the strength of expansion for the balance of 2012 and into 2013.
"Credit availability is clearly impacted by the overall strength of economic recovery, and with a 1.5-percent growth rate in the second quarter, it would seem that expansion plans for many firms are being postponed," adds Don Klepper-Smith, chief economist and director of research at DataCore Partners.
"The election is creating some degree of economic uncertainty as well, also suggesting a weakening of near-term credit demand."
• More than a quarter of respondents (27 percent) saw credit availability as a problem for their business.
• Of those who saw credit availability as a problem, 27 percent reported that lack of credit adversely impacted their ability to maintain an adequate workforce and/or forced them to reduce their workforce. Sixty-two percent said that they would be unable to grow or expand as a result of inadequate credit, and another 16 percent indicated employee compensation and/or benefits would likely be reduced as a result.
• Asked what types of financing their firms most needed, 31 percent said working capital for day-to-day operations, while another 14 percent said they needed capital for machinery and equipment purchases.
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