CT Residents Believe Economy, Business Conditions Have Improved, But Uncertain About Future

Connecticut residents are somewhat more upbeat about the state of the state’s economy, but less than convinced that good economic news will keep coming, according to the results of the Connecticut Consumer Confidence Survey for the fourth quarter of 2015, released this week.  The quarterly survey,  by InformCT, a public-private partnership that provides independent, non-partisan research, analysis, and public outreach to help create fact-based dialogue and action in Connecticut, is designed to generate an ongoing measure of consumer confidence in the Connecticut economy. When asked to think about overall business conditions in Connecticut versus 6 months ago, respondents – for the first time in three quarters – said conditions are better now than 6 months ago.  The margin was narrow - with 27 percent saying “better” and 25 percent saying “worse”, but that’s a reversal from the past two quarters, when more people were of the view that business conditions has worsened (22%-24% and 24%-28% in the two previous quarters).

The percentage of respondents who feel that the Connecticut economy is improving increased from 23 percent in the 3^rd quarter to 27 percent in the most recent survey, and the percentage expressing concern that their job, or their spouses’ job, is in jeopardy, has declined in each of the four quarterly surveys, from 38 percent in the first quarter of 2015, to 36 percent, 35 percent and now 33 percent.

Administered for InformCT by the Connecticut Economic Resource Center, Inc. and Smith & Company, the analysis is based on the responses of residents across Connecticut and addresses key economic issues.  The most recent consumer confidence survey also saw an uptick in key indicators, as the percentage who believe:

• there are “plenty of jobs for anyone who wants to work (as compared with 6 months ago)” increased from 10 percent to 13 percent
• the employment situation will be better still in 6 months increased from 15 percent in the 3^rd quarter to 17 percent in the 4^th quarter
• their personal financial situation is better now than 6 months ago increased from 63 percent in the third quarter to 65 percent in the 4^th quarter survey.

Even though Connecticut residents feel conditions are improved, they are increasingly divided when asked if they expect that will continue.

When asked to look ahead six months, respondents have consistently believed business conditions will improve, but by a narrowing margin in each of the past four quarters.  In the beginning of the year, 30 percent thought business conditions would improve, as compared with 19 percent who thought conditions would worsen – an 11 point differential.  In the following three quarters, that differential narrowed to 9 points, then 5, and now 4.

There were other positive outcomes in the final quarterly survey of 2015, as the percentage who anticipate:

• making a major consumer expenditure for furniture or some other product in the next 6 months jumped from 26 percent to 34 percent, reversing a slide from 36 percent in the year’s first quarterly survey.
• buying a new car also increased, from 22 percent in Q3 to 25 percent in Q4, the highest percentage of any of the quarterly surveys on that question.
• taking a vacation outside Connecticut in the next 6 months also rebounded, from 51 percent to 56 percent, reversing a diminishing percentage in each of the past two quarters.

There remain some troubling signs amidst the generally upbeat news.

The percentage who agree that Connecticut is a good place to live and raise a family and dropped slightly, and is under 50 percent for the first time in the quarterly surveys, at 47 percent.   The percentage of respondents who say they are likely to move out of the state in the next five years has increased in three consecutive quarters, from 32 percent to 34 percent to 37 percent, but remains lower than in the first quarterly survey, when it stood at 39 percent.

InformCT is a public-private partnership that currently includes staff from the Connecticut Economic Resource Center and the Connecticut Data Collaborative.  More information about subscribing can be found at informct.org.  Based in Rocky Hill, the Connecticut Economic Resource Center, Inc. is a nonprofit corporation and public-private partnership that provides economic development services consistent with state strategies, leveraging Connecticut’s unique advantages as a premier business location.  Smith & Company LLC, is a Shelton, Connecticut-based market research firm.