CBIA survey: Rising costs, hiring challenges, uncertainty temper growth expectations

Hartford Business Journal – Wednesday, September 3, 2025
By David Krechevsky

In a year when federal pandemic aid expired, the state’s fiscal guardrails were bent, if not broken, and the legislature approved a significant tax increase on businesses in Connecticut, business leaders are concerned about the state’s economic outlook.

The Connecticut Business & Industry Association, the state’s largest business organization, released its 2025 Survey of Connecticut Businesses on Wednesday during its annual The Connecticut Economy conference, held at the Hartford Marriott Hotel. The results reflect concerns over rising costs, workforce challenges and uncertainty over the state’s fiscal future.

The annual survey, which this year was produced by CBIA and the accounting and business advisory firm CBIZ Inc., was emailed to more than 2,800 top executives throughout the state from June 3 to July 17, following the end of the 2025 legislative session.

Most of the firms surveyed were small businesses, with 68% employing fewer than 50 people, 13% with 50 to 99 people, 11% between 100 and 249 employees, and 8% employing between 250 and 499 people. The response rate was 13%, with a margin of error of +/-5%.

The survey’s key findings include:

• More than nine in 10 businesses said the cost of doing business is rising, driven by labor, healthcare, energy, taxes and compliance costs.
• 76% of employers reported difficulty hiring and retaining workers, with skills gaps and wage expectations as top barriers.
• 59% said access to affordable, quality child care is important for attracting and retaining employees.
• Only 12% said they believe the state’s business climate is improving, while 47% said it’s static and 40% believed it’s declining.
• Two-thirds of businesses turned a profit in 2024, 18% broke even and 15% reported losses — seven points higher than forecasted.
• Employee recruitment and retention remained the leading investment priority, cited by 34% of employers.
• 31% said they plan to expand their workforce in the next six months, while 9% expected a slight decline.
• 36% are using artificial intelligence in their operations, while 73% of non-users said they are unclear how to adopt the technology.
• 20% said they believe healthcare costs and accessibility should be the General Assembly’s top priority in 2026.

CBIA President and CEO Chris DiPentima said the survey shows “companies are focused on innovation and optimization as they navigate complex state, federal and global challenges.”

“While our survey shows some signs of optimism,” he continued, “concerns about the state’s competitiveness, workforce challenges and cost pressures continue to temper expectations.”

DiPentima added that while Connecticut’s labor participation rate remains high — 14th best in the country at 64.7% — the labor shortage remains a significant economic growth challenge.

As of July 2025, the state had 77,000 unfilled job openings. That’s 22,900 (8.6%) more than before the pandemic hit in March 2020.

“The findings in this survey underscore an urgent need for targeted, business-informed policy solutions,” DiPentima said. “For Connecticut to realize its economic potential, the state must address its high costs with policies that convert its strengths into sustained economic momentum.”

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