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The Connecticut Business and Industry Association hosted a virtual summit on Friday offering an optimistic picture of the state’s industry’s ability to weather the COVID pandemic.
“Some industries are down 30, 40, even 50 percent when it comes to revenues … the fact that our workforce is only down 6 percent, that to me says manufacturers are doing everything they can to keep their skilled labor going,” Chris Di Pentima, president of the Connecticut Business and Industry Association, told the Connecticut Examiner.
“We could be in a lot worse situation,” he added.
But a recent report from the association reported concerns about Connecticut’s business climate that existed long before the pandemic, and have the potential to affect growth in the future.
According to the report, over half of the 283 manufacturers surveyed were approached about relocating or were considering leaving Connecticut this year. 63 percent believe the state’s business climate is declining, and just over half said they disapproved of how the legislature was handling the economy and job creation.
Most of the concerns are rooted in two main issues: difficulty finding skilled laborers and the expense of complying with state regulations and mandates.
Skilled labor
Business leaders call it a “grey tsunami” — a wave of experienced workers heading into retirement, leaving open positions in Connecticut that require skilled labor.
According to the survey, there were between 8,000 and 10,000 open positions in manufacturing at the beginning of this year because of a lack of skilled labor.
Di Pentima said that positions high in demand include welders, machinists, engineers and fabricators.
“The need to recruit is just as strong as ever, frankly,” said Graham Robinson, president of New Britain-based Stanley Black & Decker.
In July, the company laid off 1,000 employees, but Robinson said that his company now needs workers who can perform specialized tasks, like working with AI technology.
The state’s Chief Manufacturing Officer Colin Cooper told CT Examiner that the state was working on strengthening workforce development programs by coordinating manufacturing training programs at the community colleges and focusing on the state’s nine advanced manufacturing centers.
Kelli-Marie Vallieres, executive director of the Connecticut Workforce Development Unit, said in a panel discussion that Gov. Ned Lamont would be unveiling a plan next week for growing a skilled workforce. The plan, she said, will include career-building programs that begin in K-12 schools, as well as providing adult education.
“There’s a large number of students who don’t go on to four-year institutions,” said Vallieres. “We’ve got to make sure that they are career ready, not just college ready.”
She also said that she wants to reach people who might have barriers to receiving skills training, including a lack of childcare, mental health issues, and difficulty accessing transportation.
Vallieres said it was important for workers to understand the importance of continuing to gain new skills.
Graham agreed. “We need to ensure that we get the graduates that have the right skills for the future — not for today, for the future.”
Legislation and finance
Di Pentima said that financial uncertainty is a significant deterrent for business leaders who want to operate in Connecticut.
“Businesses want predictability,” he said. Not knowing whether taxes will go up or regulations will change means that businesses run the constant risk of incurring extra costs.
Rina Patel, vice president of operations at RSCC Wire and Cable, said that Connecticut’s business taxes and labor laws left the company less competitive on the market.
“I think there are a lot of challenges,” said Brian Montanari, president of HABCO industries, “It’s a great state to work in, but it’s a big challenge.”
Patel said that one of the best things the state could do for manufacturing was to invest in infrastructure projects.
Another concern that businesses raised in the survey was the expense of living in Connecticut.
“Clearly, we are not a low-cost area,” said Cooper.
Cooper said he thinks there is a misconception among business owners that the state doesn’t understand the importance of manufacturing to the well-being of citizens, and particularly those who are employed by the manufacturers.
“I think there’s a lag between perception and reality,” he said. “I think we’ve got leadership in the state … that has made a priority to achieve some fiscal stability and predictability.”
Cooper said that while he understands the impetus of businessmen to ask for certain reforms, like the increase of the pass-through entity tax, he doesn’t see that happening.
State Sen. Joan Hartley, D-Waterbury, chair of the Commerce Committee agrees. “We are not in a position to offer tax credits or incentives at this time,” she said.
However, Hartley said she believes that regulatory changes, such as the recent changes to the Transfer Act, will be beneficial to businesses and are more likely to happen in a period when the fiscal challenges of COVID are pressuring the state to cut costs.
Looking forward
In addition to longer-term regulatory and workforce concerns, industry has not escaped the COVID pandemic unscathed.
The survey found that 82 percent of businesses were either shrinking or holding steady and that 54 percent do not expect to make a profit this year. The manufacturing workforce has decreased by 4 percent, or about 5,300 jobs.
One of the most profoundly affected sectors is the aerospace industry, which comprises 29 percent of Connecticut’s manufacturing.
Brian Montanari, president of HABCO industries, which supplies equipment to major aerospace companies like Pratt & Whitney, said that military aerospace was doing well, but that commercial manufacturing most likely would not return to normal levels for a long time.
That said, participants at the summit said they believed the industry was on the right track to recovery.
“It takes a while to turn the battleship,” said Cooper, “But we’re on a good course.”