CONNECTICUT MID-SIZE FIRMS REBOUNDING,
BUSINESS CONFIDENCE INDEX HIGHER THAN NEW YORK AND NEW JERSEY
NEW YORK, May 28 /PRNewswire/ -- Connecticut's Business Confidence Index, a composite of future expectations and present performance, has jumped for the fourth consecutive year, according to the results of a survey announced today by National Westminster Bancorp.
Beginning from a base rate of 100, Connecticut's Index has climbed from 71 in 1989, 78 in 1990, 90 in 1991, to 96 this year. Furthermore, it leads New York and New Jersey, both of which have an index of 90. In NatWest's Business Climate Survey, 100 executives from Connecticut were interviewed.
Boosting the Index is the chief executives' optimistic assessment of business conditions. Of the Connecticut chief executives surveyed, 40 percent said that business had improved over the past year, compared to 20 percent who said it had gotten worse. In the year ahead, 72 percent expect business to improve.
"Previously, because of the financial crisis in New England, we had found Connecticut's executives to be not only trailing their peers in New York and New Jersey, but to be skittish, not hopeful of the future," said Peter Radford, NatWest's chief economist. "We are seeing a much higher degree of confidence today."
According to Radford, unlike other recessions, however, "we are not seeing any post recessionary euphoria. The executives are relieved that it's over, but at the same time they recognize that it's going to take some time to get through this."
In fact, 24 percent of Connecticut CEOs believe a full economic recovery will take three years or longer, compared to 8 percent for New Jersey and 10 percent for New York CEOs. Fifty-six percent describe the downturn as a fundamental shift in the economy, while 37 percent believe that it's a temporary downturn.
What do they project for the local economy? Forty-one percent said that they expected the local economy to improve, yet 57 percent said it will be the same or worse.
From the CEOs' responses on business conditions, it's easy to see why growth will be tempered. Even with a rise in business confidence, the same number of executives as last year, 52 percent, indicate that they will expand in the next few years. Connecticut firms are operating at 71.3 percent of capacity, lower than their counterparts in New York and New Jersey; 37 percent signal that cash flow has decreased; and 74 percent say their customers' buying behavior is more cautious than a year ago.
Also, though just 17 percent of Connecticut CEOs are either very or extremely concerned about their own company's debt level, they did express a relatively high degree of unease about their customers' ability to pay their debts. Here, 36 percent of the CEOs said they were either very or extremely concerned, and 43 percent said somewhat or slightly concerned. Just 17 percent said they weren't at all concerned.
However, of the 90 percent of Connecticut CEOs who said they have prospected for new customers in the past year, 41 percent report good success, a higher percentage than New York and New Jersey.
In terms of how satisfied they are with their current location, 51 percent of Connecticut CEOs rated it as either excellent or very good, which was down from previous years. For example, in NatWest's 1989 survey, 68 percent evaluated their location as either excellent or very good.
In sizing up Connecticut's mid-size companies: 87 percent are privately held; 42 percent export and 29 percent import; and 61 percent own their facilities and 35 percent rent. Furthermore, 66 percent of Connecticut CEOs said they worked the same number of hours as last year and 25 percent said more; and 33 percent said their income increased, while 28 percent said it decreased.
NatWest's sixth annual survey of CEOs, conducted by Northstar Research Associates Inc., covers mid-sized firms under $250 million in annual sales.
National Westminster Bancorp, a wholly-owned subsidiary of National Westminster Bank PLC, has $22 billion in assets and more than 260 branch offices in New York and New Jersey. Its main subsidiaries are National Westminster Bank NJ and National Westminster Bank USA, which has a subsidiary, NatWest USA Connecticut Corporation, serving mid-sized firms from offices in Norwalk.
/CONTACT: Tim Connolly of NatWest, 212-602-2511/ CO: ST: Connecticut IN: SU: ECO GK -- NY005 -- 4662 05/28/92 10:45 EDT