Connecticut is an expensive place to live and to run a business, and is losing young people to other states.
While it has few physical natural resources to boost its economy, such as shale oil, it does have a high quality of life and a well-educated workforce.
“The natural resource we have is our intellectual capacity,” John Traynor, chief investment officer at People’s United Bank, told guests during a recent Economic Outlook Breakfast in Shelton.
Traynor and Joseph Brennan, president of the Connecticut Business & Industry Association (CBIA), offered insights into the local and national economy at the event. The Greater Valley Chamber of Commerce event was held at Brownson Country Club.
Brennan said a goal is to make Connecticut a more desirable place for business, despite challenges such as high taxes and a high cost of living.
“We think we have a lot of strengths,” Brennan said.
Both Brennan and Traynor talked about the fact that Connecticut is losing population, and how the remaining population is getting older.
Brennan noted that many young people are not moving to the lower-cost South, but to New York City and Boston for better job opportunities.
Traynor said the state is seeing “an exodus” of young people. “Our young people go to college, then they move to Boston and New York,” he said. “We’re exporting people.”
‘We’re in the optimism business’
Bill Purcell, Greater Valley Chamber president, said both speakers gave indications of how the economy continues to improve.
“There are many positive nuggets here,” he told the gathering. “We’re in the optimism business.”
Purcell said the Valley business community is “a growing center of economic excellence,” and can help uplift the state’s overall economy.
Mayor Mark Lauretti also addressed the group, promoting Shelton as a good place for companies due to its pro-business approach and property tax stability.
“We’re one of the most affordable places — if not the most affordable — for businesses in Connecticut,” said Lauretti, noting continued growth in Shelton’s Grand List, or tax base.
He said he values input from Chamber members. “People like yourself are a true barometer of the economy. You’re the people on the front lines,” Lauretti said.
An American renaissance
Traynor gave a presentation on “The American Renaissance: Investing in 2015,” in which he said the U.S. economy will drive global growth and that lower oil prices will benefit consumers.
He said U.S. companies are the best place to make stock investments at this time. “There’s a phenomenal avalanche of capital coming into the U.S.,” he said.
Traynor said manufacturing is particularly strong in this country, due to productivity gains and because costs aren’t going up as much here as in emerging countries such as China.
When it comes to job growth, he said, Connecticut has done poorly in recent times, creating few new jobs in the past three decades. “We are dead last,” he said.
Reasons include the end of the Cold War limiting defense spending and the introduction of the state income tax in the early 1990s, according to Traynor.
He said the housing market is being held back not by affordability but by lower household formation, with limited job prospects for young folks and people getting married later in life.
Competitiveness vs. other states
Brennan promoted the “CT20x17” campaign to improve Connecticut’s business competitiveness against other states. “There are a lot of great things going on in Connecticut,” he said.
While high costs and an outdated transportation system are negatives, Brennan said, Connecticut is home to “many world-class companies,” has “a tremendous history of innovation and entrepreneurship,” and benefits from its geographic location between New York and Boston.
Brennan heads the CBIA, which is the state’s largest business organization, with 10,000 member companies.
He expressed concerns about how Gov. Dannel P. Malloy’s proposed budget might impact the business climate. He said the governor wants to raise corporate taxes and cut tax credits for companies.
Reducing tax credits will hurt some large, well-known manufacturing companies, and that damage would spread throughout the state’s economy due to “the supply chain impact,” Brennan said.