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Connecticut Economic Digest: November 1999 issue
Connecticut Business Climate Index Launched | Housing Update | Industry Clusters | Current Expansion Continues Its Recent Robust Movement

Connecticut Business Climate Index Launched
By Kolie Sun Chang, Senior Research Analyst and Mark Prisloe, Senior Economist

The Connecticut Department of Economic and Community Development (DECD) has retained the Center for Survey Research and Analysis at the University of Connecticut (CSRA) to conduct a survey of businesses in Connecticut. Results are based on 400 telephone interviews conducted across the State. The interviews are conducted quarterly by trained interviewers from the CSRA research facility in Storrs, Connecticut. Through these surveys the DECD is able to continually monitor Connecticut's business climate and to gain a more accurate assessment of future expectations.

Launched in 1999

The Connecticut Business Climate Index was launched in early 1999 to assess current economic conditions and future expectations of the business community in Connecticut. The Business Climate Index is comprised of five components: (1) future expectations for the job market; (2) confidence in the future of their business; (3) future expectations for the economy; (4) current level of satisfaction with the economy; (5) current assessment of the economy on a prosperity to depression scale.

The index has a maximum score of 100, meaning all of the businesses in the state are completely confident with the current economic conditions and in the future of the economy and the job market.

Company Profile

Two-thirds of the businesses surveyed (66%) in the current quarter are members of the following industry clusters: Financial (11%), Health (11%), High Technology (11%), Manufacturing (11%), Telecommunications (11%), and Tourism/Entertainment (11%). The remaining one-third of the businesses surveyed (33%) are not members of the industry clusters.

Fifty-eight percent of the businesses surveyed have one to four employees. Thirty-three percent have five to fifty employees. Nine percent have fifty or more employees.

Twenty-six percent of the businesses surveyed have gross revenues of under $100,000. Thirty-four percent of the businesses surveyed have gross revenues of $100,000 to $500,000. Sixteen percent of the businesses surveyed have gross revenues of $500,000 to $1 million. Twenty-four percent of the businesses surveyed have gross revenues of $1 million or more.

Thirty-three percent of the businesses surveyed (132 in total) are located in Fairfield County. Twenty-nine percent (118) are located in Hartford County. Twelve percent of the businesses surveyed (46) are located east of the River. Twenty-six percent of the businesses surveyed (106) are located in the rest of the State.

Meeting Strategic Needs

According to the DECD, the new index is designed to measure the overall strength of the economic climate and to provide the Department with strategic and targeted information on the most important individual sectors. The strategic information will allow us to efficiently target resources to meet the needs of these vital businesses.

Quarterly Summary Results

The Connecticut Business Climate Index for the first quarter of 1999 was 71.9 on the 100-point index scale. Respondents were surveyed in late 1998. This result compared favorably to all previous indices conducted by DECD measuring business opinion about the economy. It indicated that Connecticut businesses continued to have high levels of confidence in a strong-performing economy.

Respondents in the January survey produced an index for the second quarter of 72.9. This indicated continued strong optimism for the second quarter.

Respondents in June resulted in a third-quarter index of 67.6. Businesses' satisfaction with current economic conditions remained high.

A strongly positive business assessment of both the U.S. and the Connecticut economy continued in the final quarter of this year as the DECD released on October 1, 1999 the most recent Connecticut Business Climate Index. The index stands at a robust 70.1. The index rebounded from the slight drop it took in the third quarter.


According to the four quarterly results, the business community in Connecticut has a strongly positive assessment of both the U.S. and the Connecticut economy in general. For example, in the fourth quarter the vast majority (85%) of companies surveyed say that the U.S. and Connecticut economies are experiencing moderate recovery, strong recovery, or prosperity. Businesses in Connecticut (79%) also continue to be confident about the future of their own company over the next few years. Moreover, the vast majority of businesses in Connecticut (83%) say that the business climate in the state is getting better or staying the same. Only a small portion of the businesses surveyed (12%) think the business climate is getting worse. In addition, most businesses (75%) report that the state government is paying as much or more attention to the needs of business as it did a few years ago. While a small percentage (25%) rated general business conditions as fair, most businesses in the state (67%) rate the present general business conditions in their area as good or excellent.

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Industry Clusters
Business Training Grants

One of the latest industry cluster developments is the new Connecticut Business Training Networks grant program helping employers maintain a workforce skilled enough for today's global challenges. Networks are five or more independent small or medium size companies with fewer than 500 employees who, by an application process, indicate their eligibility. The networks are expected to evolve into active, self-sustaining organizations. The first network, "Spring Training in Connecticut, LLC" consisting of five small spring manufacturers in the Bristol area has already formed.

Evaluation criteria include project objectives, potential to impact member companies and member employees, measurable outcomes, and budget. Grant funding can be obtained for a total of $85,000 - up to $10,000 for exploratory work, up to $25,000 for each of two years' development work, and an additional $25,000 for one year of an operational phase. Companies comprising networks are often in similar lines of business and - while not required - are often geographically close to one another.

The program is a partnership among the Governor's Council on Economic Competitiveness and Technology, the Connecticut Business and Industry Association, the Department of Economic and Community Development, the Connecticut Economic Resource Center, and the Department of Labor. For more information contact Judy Resnick at (860) 244-1900.

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Housing Update
September Permits Second Highest in 90's

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 894 new housing units in September 1999, a 9.1 percent decrease compared to September of 1998 when 984 were authorized.

The Department further indicated that the 894 units permitted in September1999 represent a decrease of 9.8 percent from the 991 units permitted in August 1999. The year-to-date permits are down 2.3 percent, from 8,570 through September 1998, to 8,376 through September 1999.

Reports from municipal officials throughout the state indicate that Windham County with 15 percent showed the greatest percentage increase in September compared to the same month a year ago. Fairfield County followed with a 1.5 percent increase.

Hartford County documented the largest number of new, authorized units in September with 204. Fairfield County followed with 197 units and New Haven County had 184 units. Danbury led all Connecticut communities with 46 units, followed by Hamden with 31 and Manchester with 27.

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Connecticut's School-to-Career System

What is Connecticut's School-to-Career System?

School-to-Career is a comprehensive education system that provides all students the opportunity to connect learning in the classroom with the needs and demands of the workplace and/or higher education. Connecticut's School-to-Career system shows students from elementary through post-secondary education how school-based academic knowledge applies to life outside the classroom and how it links to a variety of career paths. Students benefit from participation in a combination of school and work-based experiences, connected by a series of career exploration activities and assessments, which result in a more focused selection of course work based on potential career interests.

Student achievement is raised through participation in learning experiences that require the application of knowledge and skills to real-life situations. School-to-Career initiatives support collaboration between the business and education communities thus providing students the experience to make informed career decisions.

How is School-to-Career Structured?

Every School-to-Career system must contain three core elements:

  • School-Based Learning - Classroom instruction that integrates high academic standards with occupationally based skills incorporated in Connecticut's eight career clusters.
  • Work-Based Learning - Work experience which provides structured training and mentoring that occurs in the workplace.
  • Connecting Activities - Activities that link the classroom instruction with workplace experience, assisting students with choosing an appropriate curriculum.
What are Connecticut's Career Clusters?

Connecticut's School-to-Career system is organized around eight industry-identified career clusters. The eight career clusters are:

  • Arts and Media
  • Business and Finance
  • Construction: Technologies and Design
  • Environmental, Natural Resources and Agriculture
  • Government, Education and Human Services
  • Health and BioScience
  • Retail, Tourism, Recreation and Entrepreneurship
  • Technologies: Manufacturing, Communications and Repair

Student work-based experiences in any of these eight clusters expose them to all aspects of an industry, from labor, health and safety issues and principles of technology to planning, management and finance. Students also learn about elements unique to an industry and to the general day-to-day details of running an entire business. In addition, the general work expectations of promptness, commitment and persistence are reinforced.

What are the Benefits to Employers?

The benefits to employers participating in Connecticut Learns include: and investment in Connecticut's future; a key role in training the future workforce; strong community ties; and a positive impact on the morale and commitment of your employees through their interaction with students.

How can an Employer Get Involved as a Partner?

There are a variety of roles employers can play and opportunities they can provide as partners in the School-to-Career initiative. These include: participation in career days at schools, presentations to schools in the classroom, company tours for students and teachers, job shadowing experiences for students and teachers, internships for students and teachers and workplace mentoring.

Who can you Call to Learn More About School-To-Career?

Debra Hinck at the Connecticut Department of Labor at 860-263-6522 or Ann Gaulin at the Connecticut Department of Education at 860-807-2102.

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Current Expansion Continues Its Recent Robust Movement

The Connecticut coincident employment index jumped, once again, to a new peak in the current expansion with the release of (preliminary) August 1999 data. The Connecticut leading employment index continued to drift, decreasing slightly from July, but increasing slightly from August last year.

The coincident index, a gauge of current employment activity, rose to a level not seen since March 1989, one month after its peak of the 1980s expansion. As the accompanying chart reveals, the coincident index now stands near its all-time peak. The coincident index rose by 4.6 percent over the last twelve months. Contributing to this increase was the decrease in the total unemployment rate from 3.2 to 2.1 percent. The dramatic drop in the total unemployment rate from 3.4 percent in June to 2.6 percent in July to 2.1 percent in August has left most analysts at a loss to provide a rationalization. Many cannot believe that the unemployment rate has fallen to so low a level. Smaller contributions to the growth of the coincident index were the 1.3 percent increase in nonfarm labor and the 0.9 percent increase in total employment. Finally, the insured unemployment rate increased from 1.98 to 2.02 percent, tending to moderate the increase in the coincident index.

The leading index, a barometer of future employment activity, has bounced around considerably during the last several years. Since late 1996 and early 1997, however, it has remained in the neighborhood of its current level. See the accompanying chart for details. The leading index's signal light definitely began flashing yellow a few years ago. We continue to monitor the leading index's signal for its next change to green or red. Over the most recent 12 months, the leading index has increased by 0.3 percent.

The August release continues the unusual event noted in the last two month's columns - total employment below nonfarm employment, although the gap narrowed significantly with nonfarm employment now only 2,000 higher than total employment.

In summary, the coincident employment index rose from 97.5 in August 1998 to 102.0 in August 1999. Three components of the index point in a positive direction on a year-over-year basis with higher nonfarm employment, higher total employment, and a lower total unemployment rate. The other component points in a negative direction on a year-overyear basis with a higher insured unemployment rate.

The leading employment index rose from 89.0 in August 1998 to 89.3 in August 1999. Four index components sent positive signals on a year-over-year basis with lower initial claims for unemployment insurance, a higher average workweek of manufacturing production workers, a lower shortduration (less than 15 weeks) unemployment rate, and higher total housing permits. One component sent a negative signal on a year-over-year basis with lower Hartford help wanted advertising.

SOURCE: Connecticut Center for or Economic Analysis, University of Connecticut. Developed by Pami Dua [Economic Cycle Research Institute; NY,NY] and Stephen M. Miller [(860) 486-3853, Storrs Campus]. Stan McMillen and Hulya Varol [(860) 486-3022, Storrs Campus] provided research support.

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Published by the Connecticut Department of Labor, Office of Research
Last Updated: October 6, 2005