A regular survey of credit conditions among Connecticut’s businesses has found the lowest expectations in four years, as Wall Street’s woes begin to have an impact in the state.
Since 2004, the Connecticut Business and Industry Association has been taking the temperature of the state’s credit markets every quarter. This latest survey, taken in mid-September produced an index of 19, anything under 50 indicates a negative view of credit among local businesses. The index shows a more than 50% decline from the previous quarter, and is the worst result since the survey began. And it’s not only the current situation that’s of concern. 35% of businesses expect credit conditions to worsen. CBIA chief economist Peter Gioia says that has a real effect on businesses.
"It limits their ability to grow or expand, it limits their ability to finance increased sales, it limits their ability to increase inventory to meet future demand. It can also have an effect on the number of employees that they employ and the compensation and benefits to those employees."
Gioia cautions that though confidence as measured by the survey is low, most companies do still say that accessing credit is possible, although terms may be much tighter than usual.