East Haven’s 167 Commerce St., a 14,000-square-foot block-and-steel industrial building in the East Haven Industrial Park, is currently available for lease. A number of manufacturers in Connecticut have recently bought, leased or expanded properties.

The cost of health care and property taxes continue to concern Connecticut manufacturers, but they are nonetheless especially optimistic about economic conditions and anticipate growing their businesses over the next year, according to the results of a survey conducted by the Connecticut Business & Industry Association.

That should lead to another good year for industrial real estate, according to Bill Clark, senior vice president with Branford-based The Geenty Group Realtors.

“Most of them are anticipating another good year,” Clark said.

2004 was a banner year for industrial real estate at The Geenty Group, Clark said, adding that he hopes it will continue.

Thirty-three percent of manufacturers who responded to the survey said they plan to increase their work force within the next 12 months. Fifty-five percent of respondents said they expect to maintain their current employment levels.

“Although the recovery from the 2001 recession has been slower than anticipated, manufacturers have continued to invest in their employees, hiring for numerous positions including management, sales and skilled machinist positions,” according to the survey results. Manufacturers responded to the survey earlier this year.

‘Very Optimistic’

Small manufacturers are enjoying considerable success in Connecticut, according to Tim D’Addabbo of Cushman and Wakefield’s Hartford office. Those with less than 50,000 square feet are doing especially well, he said.

“They really seem to be growing, seem to be excelling,” D’Addabbo said.

The success of small, homegrown manufacturers that are not reliant on large corporations is particularly encouraging, he said.

“That’s reason to be very, very optimistic,” D’Addabbo said.

Companies that diversified in the late 1980s or early 1990s and don’t rely exclusively on one sector also are doing well, according to D’Addabbo.

“They have been the ones who weathered through some of the downturns,” he said.

Additionally, businesses that manufacture very specific parts or pieces seem to be growing, he said.

“You get the sense that ’05 could be a very good year,” D’Addabbo said.

This year was busy at The Geenty Group, Clark said, but activity has slowed down because of the upcoming holiday season. He expects activity to pick up after January.

“Most of the people I’ve talked to seem to be optimistic,” Clark said. “No bad vibes.”

One of Clark’s recent deals was the $1.5 million sale of a 33,000-square-foot building in Wallingford. An investor bought the industrial facility at 65 South Turnpike Road in October.

Another property with which he is involved is 167 Commerce St. in East Haven, a 14,000-square-foot block-and-steel industrial property in the East Haven Industrial Park that is current available for lease.

D’Addabbo also has closed some large industrial deals recently. He worked on deals for Precision Punch, which built new facilities in Berlin; Prism Technology Co., which built facilities in Bristol; and Metalform Co., which moved to Berlin from New Britain, doubling the size of its plant. He also worked on deals for PTI Industries, which built a new facility in Enfield; Overhaul Support Services, which expanded in East Granby; and A1-TEK Instruments, which expanded in Cheshire.

He expects the industrial real estate market next year to be strong.

“Everybody is optimistic and keeping their fingers crossed,” he said.

But Connecticut’s industrial real estate market historically has been stable and there is not much quality product on the market, D’Addabbo said. He has seen, however, prices rising on the good buildings that are on the market.

Many of the manufacturers who responded to the survey also said that, as the economy continues to recover, they plan to introduce new products or services or make other improvements. Seventy-two percent said they plan to make such improvements this year, compared with 64 percent a year ago.

“Manufacturers are still having a hard time pulling out of the latest recession,” said John Kirschner, partner and director of the manufacturing group at Blum Shapiro, the accounting firm that worked with CBIA on the survey. “But the survey shows that these same manufacturers are very optimistic about the future and plan on aggressively pursuing new development strategies to compete in the global market.”

Part of manufacturers’ optimism comes from President Bush’s re-election, Clark said. Many manufacturers were concerned about the election, he noted.

But D’Addabbo said the result of the election might not make much of a difference on Connecticut’s manufacturers.

“I don’t know if there’s a direct correlation to the market,” he said. “Macro events don’t affect us as much.”

Other concerns had to do with taxes and other costs. Seventy-seven percent of survey respondents said they were worried about property taxes on real estate and equipment, 45 percent were concerned about unemployment compensation taxes, 35 percent were concerned about corporate income taxes and 34 percent were concerned about personal income taxes, according to the survey results.

But the price of health care was the biggest business cost concern of manufacturers. Eighty-two percent of manufacturers who responded said it was their largest or second-largest concern, while 43 percent named workers’ compensation costs, 23 percent named labor costs and 22 percent named payroll costs as their biggest concerns.

Many of the manufacturers’ concerns can be alleviated with help from state government, according to a press release from CBIA.

“Many challenges faced by Connecticut’s manufacturers can and should be alleviated by the prudent actions of state government, which has significant control over many of the major cost concerns of manufacturers, including health care costs, workers’ compensation and unemployment compensation costs,” noted Kenneth O. Decko, CBIA president and chief executive officer, in the release.

“The revitalization of manufacturing must be a top priority or the state will risk seriously imperiling the state’s economy and the well-being of its citizens,” Decko added.

Sixty-five percent of the manufacturers who responded to the survey said they anticipate realizing profits this year, while nearly half said they recorded profits last year.

Manufacturers’ outlooks changed as well. Thirty-four percent said the outlook for their businesses was good or excellent, an increase from 19 percent last year. But 43 percent said the outlook for their firms was poor or fair. That was a decrease from 63 percent who said the same thing last year, according to the survey results.