More Connecticut businesses have failed in the first quarter of 2009 than in any previous year recorded. But state officials are not giving up. There is a glimmer of hope that the end of the recession is coming.
The business failure rate is up 17 percent from the first half of 2008, Secretary of the State Susan Bysiewicz said.
The state’s new and unfortunate business failure record is 6,944 business closings, and an additional 3,467 businesses filed papers to dissolve in the second quarter.
Entrepreneurs are also slower to go into business for themselves. New business starts -- 14,000 in the first half of 2009 -- are down 9.6 percent from last year.
"Obviously, this is still a difficult economic climate for our state's entrepreneurs, but we may be starting to see the recession bottom out," Bysiewicz said. "While 2009 may yet set the record for most business failures, it appears the severity of both the number of closures and the decline of new business start-ups is lessening, so I see this as a glimmer of hope for our economy.”
Don Klepper-Smith, Chief Economist and Director of Research for DataCore Partners LLC and Chairman of the Governor's Council of Economic Advisors, said the state is still facing the headwinds from a national recession but he’s also optimistic that the recession is in the process of bottoming.
“Over the near-term we've seen the continued loss of jobs, a lackluster housing market and a risk-averse lending environment. Business attitudes have remained cautious as a result,” he said. “Hopefully, confidence measures, which generally lead to overall economic activity, will start to improve from here, suggesting that business formation could improve in 2010."
The Adversity Index, a study by MSNBC and Moody’s, adds to the cheerier picture by saying, 'hang in there.' Things look they are getting better, at least for two areas of the state.
They study looked at the fiscal health of all 50 states and identified 23 metro areas where the recession might be nearing the bottom. They include the Hartford/West Hartford area and the Norwich/New London area.
The study grouped areas together looked at Bridgeport, Stamford and Norwalk; Hartford, West Hartford and East Hartford; New Haven and Milford; and Norwich and New London.
