Hartford Business Journal

8 Hartford Business Journal • March 11, 2019 • www.HartfordBusiness.com Reporter's Notebook Gregory Seay | gseay@HartfordBusiness.com Real Estate, Economic Development/Construction, Banking & Finance and Manufacturing MANUFACTURING CT's 4,000-plus manufacturers try a larger umbrella C onnecticut is home to more than 4,000 manufacturers, all of varying sizes in terms of sales, staffing and product mix. A small percentage belong to one of more than a half-dozen manufacturing industry trade groups or lobbies. So many members and lobbies, in fact, industry leaders say, that it's often difficult for them and their industry and legislative allies to know whom to reach out to on issues vital to the manufactur- ing sector's health and standing. To be more responsive to issues and inquiries from within and outside the industry, the state's manufacturing par- ticipants, with the aid of the Connecti- cut Business & Industry Association and ConnSTEP, have banded together to create the Connecticut Manufacturers' Collaborative (CMC). Officially launched last October and housed in CBIA's offices in the Metro Center office building in downtown Hartford, CMC exists to engage its 1,000 members with their peers in and outside manufacturing, as well as lawmakers, students and other potential hires. Paul Murphy is a retired manufactur- ing executive who is executive director of the Advanced Components Manu- facturers of Connecticut and Western Massachusetts, based in Rocky Hill. "We said, 'let's put everything aside and put one voice together,' '' said Murphy, hired to run ACM following his retirement last summer as president of Farmington aeroparts maker Mallory Industries Inc. Since CMC's formation, members of its leadership advisory board have met with Gov. Ned Lamont, asking him to create a taskforce examining how the state and manufacturers can collaborate to solve fis- cal and job-creation issues important to both. Among proposals the group is pushing this legis- lative session, backed by CBIA's lobbying efforts, are creation of a "secretary" position within the governor's office who would focus on manufacturing policy and programs; extension of the manufacturing ap- prenticeship tax credit to pass-through entities; and continuation of the state's manufacturing voucher, incumbent worker training, and apprenticeship programs, among other workforce- development initiatives. Murphy points out state data showing that every dollar invested in manufacturing returns $1.89 directly to this state's economy. In addition, every manufacturing job created generates 3.4 more jobs in the state's economy, he said. "The state knows that with their fiscal woes, we're the ones who can help gen- erate growth and wealth," Murphy said. Jamison "Jamie" Scott is executive vice president of Air Handling Sys- tems in Woodbridge and executive director of the New Haven Manufac- turers Association, the largest of the seven producers' groups in this state. With the current availability of some 10,000 Connecticut manufacturing jobs projected to reach 30,000 in com- ing years, Scott said CMC's value is spreading public awareness of "some of the great programs in this region'' for industry training and employment. "There's strength in numbers,'' he said. REAL ESTATE Hartford's slowly improving commercial realty sector G reater Hartford's commercial real estate market con- tinued its slow, if largely un- remarkable, improvement in 2018, one of Connecticut's and New England's leading commercial brokers reports. According to CBRE's 2019 market update report, downtown Hartford's office market underwent a small but noticeable improve- ment. There was increased absorption of 24,000 square feet of vacant center-city of- fice space vs. 19,000 square feet that was filled in 2017. Also, average asking rents improved last year to $21.01 per square foot vs. $20.94 average rent in 2017, CBRE said. CBRE projects that, as more suburban office tenants and others look for downtown space, the downtown vacancy rate will continue improving. Meanwhile, Hartford's suburban office markets again bore signs of slowing demand for space, CBRE data showed. In the west market, for example, which includes Farmington and West Hartford, 2018 ab- sorption of 202,000 square feet was less than half that of 2017, pushing that quadrant's vacancy to 18.1 percent last year from 16.7 percent in 2017. The east, south and north quadrants either experi- enced slower leasing or minimal activity, CBRE said. "2019 looks to be largely the same as 2018," CBRE said in its suburban Hart- ford office market forecast, "with both leasing activity and rental rates remaining flat. There is a significant amount of planned give- back space by corporate us- ers that will take the market some time to absorb.'' As in recent years, Great- er Hartford's industrial- space market continues to hold promise for landlords and tenants. According to CBRE, tenants absorbed 1.2 million square feet of industrial manufacturing- distribution space vs. 758,000 square feet in 2017, slashing overall industrial vacancy last year to 7.2 percent from 8.8 percent I-Health/DSM's 226,000-square-foot Enfield lease; Coca-Cola Bottling's 200,000-square-foot South Windsor lease; and U-Haul's 192,000-square-foot Hart- ford lease were among key drivers in cutting Greater Hartford's industrial va- cancy, CBRE said. Noticeably absent from the industrial scene last year, however, was the completion of construction on any large- format buildings, the realty broker-adviser said. "This was merely a mat- ter of timing," CBRE said, "and several large tenants are seeking facilities sized from 400,000 square feet to more than 1 million square feet." BANKING & FINANCE CT banks record $1.2B in 2018 profits It's official, Connecticut's 38 federally insured banks had a banner year in 2018, collectively recording over $1 billion in profits for the first time ever. A strong economy and federal tax cuts helped Connecticut banks collectively report $1.2 billion in profits in 2018, Federal Deposit Insurance Corp. data show, which was up 38.5 percent from 2017. Here's a snapshot of Connecticut banks' 2018 performance. 2018 2017 % Change ($ amounts in millions) Total employees 14,833 14,574 1.8% Net income $1,199 $866 38.5% Total assets $113,481 $111,180 2.1% Total loans & leases $83,365 $81,484 2.3% Total deposits $88,506 $85,945 3% Nonperforming assets to assets 0.56 0.52 7.7% Source: Federal Deposit Insurance Corp. Greater Hartford office asking rents Source: CBRE $0 $5 $10 $15 $20 $25 Rents per square foot City of Hartford $21.01 North Suburbs $16.85 South Suburbs $19.23 East Suburbs $20.05 West Suburbs $21.61 Jamison Scott, Executive Vice President, Air Handling Systems Paul Murphy, Executive Director, Advanced Components Manufacturers of Connecticut

• Cover