Hartford Business Journal

35 HARTFORDBUSINESS.COM | DECEMBER 13, 2021 Editor's Take I t's fair to say Gov. Ned Lamont has classed up Connecticut's economic development efforts. If you attended the state's Dec. 2 Economic Development Summit you saw that firsthand. The somewhat swanky event, hosted by the Department of Economic and Community Development, included live bands, a free breakfast and lunch, brewers and wineries offering spirits (even as early as 9 a.m.) and a dressed- up Bushnell theater that welcomed hundreds of guests — many of them top political, economic development and business leaders. The goal was to promote the state and showcase economic development opportunities. There was a noticeable buzz in the air, most likely because people were excited to be at a live, in-person event in the still-age of COVID. But you get the sense that people, even private sector leaders, are a bit more optimistic about Connecticut's future, particularly coming out of a challenging and at-times frightening pandemic. That was reflected in a recent Connecticut Business & Industry Association survey, which found 16% of respondents said the state's business climate was improving, up from 7% in 2020. Meanwhile, 39% of respondents said they expected the state's economy to grow in the next 12 months, up from just 12% during pandemic-stricken 2020. Look, those numbers aren't anything to publicize nationally, but for a state that's been singing the blues for the last decade-plus, it's a starting point. Hartford Business Journal conducted its own reader survey recently that also showed optimism is up. (You can see those results in our Jan. 3 economic forecast issue.) We also have a better economic development strategy in place. The state has moved away from the Malloy administration's wasteful and ill-fated incentives-for-all approach to focus on more targeted investments in companies that make sense having a presence here. Recruits also don't get incentives until they've delivered on their jobs-creation promise. Just as important was the founding of AdvanceCT, the state's reconstituted economic recruitment arm made up of private-sector leaders who are working to convince companies from outside the state to relocate here. It had a few key wins in 2021. Having business leaders cheerlead, as opposed to simply relying on politicians, is a more effective recruitment strategy. At any rate, the economic development summit was a good way to end a year that brought a lot of uncertainty, and create some momentum going into 2022. Before we turn the calendar, here's a look back at some of the key takeaways from 2021. The Good For more than a decade, most of the economic news and data coming out of the state wasn't very good. Some have called the 2010s a lost decade — even prior to the pandemic Connecticut still had not fully regained the jobs it lost during the Great Recession. We were also dogged by continual budget deficits, tax increases and the loss of some corporate headquarters. The business community had a pessimistic outlook. Some of those numbers started to turn around this year. We found out that Connecticut's population actually grew a bit over the last decade (0.9%). We showed some strong GDP growth (5.9% in the second quarter) although it didn't keep pace with the national average, and we have budget stability, at least in the short term. The state is currently running a budget surplus and has a $3.1 billion rainy day fund, one of the largest reserves of any state in the country. As Lamont pointed out during the economic summit, the state's debt rating has also been upgraded. A desire for a more suburban lifestyle amid the pandemic has also benefited the state and helped lead to a rare population burst over the last 18 months, underscored by the red-hot housing market. We've also had a few New York tech companies relocate to Connecticut, mostly to Stamford and Fairfield County. The Bad While Connecticut has seen some positive growth we are still trailing the nation in key categories. For example, the U.S. population grew 7.4% over the last decade compared to the state's barely 1% gain. And our 6.4% unemployment rate is above the U.S. 4.6% jobless rate. Connecticut has only recovered 72.8% of the 292,400 jobs lost during the COVID-19 shutdown. There is much work to be done, particularly on the workforce shortage that is a national issue, but seems to be affecting Connecticut in a more pronounced way. At the end of October, there were 79,500 fewer people working in the state compared to Feb. 2020, despite about 70,000 job openings, according to the CBIA. State and private sector leaders must figure out ways to get people back to work. Uncertainty Finally, the pandemic has brought plenty of uncertainty in all areas of life, business and the economy, including related to the future of work and downtown Hartford. In many ways those two issues are closely linked together. While many cities across the country are starting to recover from the pandemic, Hartford has a longer road ahead of it. That's because many of the city's largest employers continue to operate remotely. The spawning of COVID-19 variants throughout this year has delayed return-to-office plans on numerous occasions, leading to less feet on the street and holding back the city's ability to regain its pre- pandemic vibrancy. Clearly, there's more activity in the city now than there was 12, six or even three months ago, but Hartford's recovery depends on two factors: more employers getting their workers back to the office and the continued development and absorption of multifamily housing. 2022 will be a key indicator year for Hartford. Not only will hundreds of new apartment units come online, but I believe many companies will settle on a more permanent work strategy, giving us a better sense of the number of workers who will be in the center city on a regular basis. How both those issues play out will determine how the city moves forward. Swanky economic development summit aims to build momentum for 2022, as we wind down a year of uncertainties Attendees at DECD's Dec. 2 Economic Development Summit network at The Bushnell theater in Hartford. Greg Bordonaro PHOTO | CONTRIBUTED

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