COLONIE — CEOs across upstate are less confident in the state of the economy than they were a year ago, according to the 13th annual Upstate New York Business Leader Survey by the Siena College Research Institute.
But, more than half, 53 percent, of the CEOs of private for-profit companies do not think the U.S. is headed for a recession before the end of the year.
“Across upstate, business leader confidence has dropped this year as CEOs have a less positive assessment of current conditions as well as growing concerns about the future,” said SCRI Director Don Levy. “While few see a recession on the immediate horizon and well over half predict that their business will continue to be in business 10 years from today, many are concerned about headwinds including governmental regulation, health care costs and workforce suitability.”
According to the poll, just 17 percent of CEO are confident, down from 26 percent a year ago while 36 percent, up from 26 percent a year ago, say conditions have worsened, according to the poll, which is sponsored by the Business Council of New York State.
Two-thirds of upstate CEOs identify health care costs as a challenge, while 65 percent say governmental regulation and 58 percent are challenged by taxation.
Only 6 percent say New York state is doing an excellent or good job of creating a business climate in which companies like theirs will succeed and only 13 percent are somewhat or very confident in the ability of the state government to improve the business climate.
“The results of this survey should once again send a strong signal to lawmakers in Albany . The women and men that provide private sector jobs in New York state believe that more needs to be done to protect their investments and the people they employ,” said Heather Briccetti, president and CEO of The Business Council of New York State. “These results compare closely to what we hear from New York business leaders every day, and reinforces our efforts promote pro-jobs, pro-investment reforms in Albany.”
The majority of CEOs, continue to call for government spending cuts, while 52 percent are calling for business income tax reform and 50 percent would like to see personal income tax reform.
More than half, 51 percent, say the Paid Family Leave Act, has had an adverse impact on their business, 53 percent say minimum wage increases have hurt and 54 percent expect legislation to reach zero carbon emissions in the electricity sector by 2040 and reduce greenhouse gas levels by 2050 will have an adverse effect on the state economy, according to the poll.
CEOs do have more confidence in the federal government’s ability to improve business conditions, but while last year more than half gave it a grade of good or excellent in creating a successful business climate, that number has shrunk to 39 percent, a decrease of 12 points. Similarly, 37 percent, down from 46 percent last year, are somewhat or very confident in the ability of the federal government to improve the business climate.
“About four of every 10 CEOs continue to give the federal government pro-business grades … Still, adding to their poor assessment of state government and their negative reaction to recent legislation including the Paid Family Leave Act and minimum wage increases, a majority say the general business climate in their immediate area is staying the same while a third say it is worsening, and only 28 percent rate local governmental support for business as either good or excellent,” Levy said.
The Index of Business Leader Confidence, computed based on interviews with 667 business leaders of upstate companies stands at 75.3, down from 96.6 last year, well below the breakeven point of 100 at which overall optimism and pessimism towards the current and future economic conditions are balanced.
Fifty-nine percent of upstate CEOs rate say their local workforce is fair or poor while 39 percent say it is excellent or good, according to the poll.
Just 21 percent of CEOs, down from 51 percent in 2013, say that there is an ample supply of local workers that are appropriately trained.
“When asked to rate the job applicants they see on seven attributes, CEOs assessments of potential employees are down in every category from what they thought in 2013 and in every case – technical skills, verbal skills, writing skills, initiative, work ethic, being realistic about compensation and professionalism – no more than 32 percent give applicants a grade of excellent or good,” Levy said.
Many CEOs are looking to hire, especially workers who can contribute on day one. According to the poll, 30 percent of CEOs plan to increase their workforce this year while 12 percent plan to cut back.
Nineteen percent, down from 27 percent a year ago, expect the economy in New York state to be better over the next year. Thirty-eight percent expect it to remain the same and 43 percent, up from 30 percent last year, expect the economy to worsen.
Looking to the year ahead within their own industry, 18 percent, down from 27 percent last year, expect conditions to improve while 46 percent, up from 33 percent a year ago, anticipate worsening conditions.
Fifty-five percent of CEOs say that they will concentrate on expansion of existing markets, 50 percent on growth in existing products, 29 percent on technology innovation, 27 percent on internal restructuring and 26 percent on entry into new markets.
Forty-one percent of CEOs, down 9 points from last year, expect revenue growth in the coming year, while 34 percent, down from 37 percent last year, expect growth in profits. And 51 percent, down from 57 percent, of upstate CEOs plan to invest in fixed assets in 2020.
“While the mood of upstate CEOs is down this year, they will continue to invest in their companies, look for qualified workers and do the hard business of commerce each and every day,” Levy said. “Few see a recession coming this year but many look for more understanding and support from elected officials as they face regulatory challenges in a market that they see as more and more challenging.
The poll was broken down into seven regions of the state. Other findings from the Capital District include:
• 1 percent of CEOs think the business climate is considerable better than last year while 59 percent think it is about the same and 3 percent think it is considerably worse
• 2 percent of CEOs think they will grow revenue substantially over the next year while 50 percent think they will grow moderately, 31 think they will stay about the same and 2 percent think they will decrease substantially.
• 61 percent plan to expand existing markets, 24 percent plan to enter into new markets, 23 percent plan to enter into new product lines, 28 percent plan on internal restructuring.
• 1 percent plans to substantially increase the workforce, 57 percent plan to keep it about the same and 8 percent plan to decrease the workforce.
• 39 percent say if they had to do it all over again they would locate their business in New York while 59 percent say it would be somewhere else.
The poll was conducted from October to January 2019 and interviewed 667 business leaders from across upstate New York, including the Capital District, Central New York, the Finger Lakes region, the Mid-Hudson region, the Mohawk Valley/Southern Tier region, Westchester and Western New York.