LOUDONVILLE — Not surprisingly, COVID-19 has hurt business across the board, according to the 14th annual Upstate New York Business Leader Survey by the Siena College Research Institute.
According to the poll, sponsored by the Business Council of New York State, 80 percent of upstate CEOs say economic conditions worsened since COVID-19 took hold in March, 2020. Just 40 percent are predicting an improvement this year while 17 percent say conditions will remain the same and 43 percent think things will get worse.
Three quarters of the CEOs surveyed say COVID-19 increased their cost of doing business while two-thirds say the pandemic has decreased their revenue and profits and half say it has reduced the demand for their product or service.
“Predictions and plans for 2020 were instantly discarded as dealing with the pandemic became the number one concentration and challenge for upstate CEOs,” said Siena College Research Institute Director Don Levy. “Despite its devastating effects, nearly 40 percent of CEOs expect to emerge from the pandemic as a stronger business well positioned to be successful while half think they will survive and return to where they were before the virus hit. Unfortunately, one in seven say that they may or may not survive.”
Twice as many CEOs give state government a grade of either excellent or good on creating a climate to help business succeed than did a year ago, but it is still only 12 percent of those surveyed, up from 6 percent.
“The results of this survey come as no surprise and underscore the important message the Business Council has been amplifying for months: New York state is in a critical position as a result of the pandemic,” said Heather Briccetti, president and CEO of The Business Council of New York State. “Unfortunately, the recently agreed-upon state budget and business tax increases do not help, and only create more harm to private sector employers.”
Slightly more, 20 percent, are confident in state government’s ability to improve the business climate with nearly 60 percent citing government regulation and taxation as among the top challenges heading into the rest of 2021.
The CEOs are calling on state government to provide business and personal tax relief, cut spending, fund business development incentives and infrastructure.
Twenty-four percent give the federal government an excellent or good grade of promoting a successful business climate, down 15 points from last year, while 31 percent are confident in the federal government’s ability to improve the business climate.
Thirty-nine percent believe a recession is likely or almost certain before the end of 2021.
Three-quarters of those polled received federal funds to keep their business open or help pay for adaptations required to meet to COVID-19 safety requirements. That same number think the continuing impact of COVID-19 as the top challenge in 2021.
Nearly half, 47 percent, are satisfied with New York’s management of the pandemic while only 40 percent are satisfied with the federal government’s response. Looking forward, 46 percent are confident in the state’s management of the crisis while more, 53 percent are now confident in the federal response.
“Many CEOs were hit hard by the pandemic’s effects. Revenues, profits, and demand were down and costs were up including 62 percent saying that COVID-19 safety measures had a significant financial impact on their business,” Levy said. “Forty-percent think that state restrictions were too strict but more, 58 percent, believe the state’s restrictions were about right. In response to the pandemic, CEOs had to change many of the ways that they do business.”
Fifty-seven percent have increased the ability for their employees to work from home and 48 percent of those plan to keep this change indefinitely. Thirteen percent have reduced their office space and 42 percent have increased technology support for their employees and 47 percent have increased technical security measures.
Only 28 percent of CEOs, up from 21 percent a year ago but down from 51 percent in 2013, say there is an ample supply of local workers that are appropriately trained.
Over the course of the year, 48 percent of CEOs reduced the size of their workforce but less than 30 percent plan to make that reduction permanent.
Looking forward from today, 27 percent plan to increase their workforce while the majority, 62 percent plan to keep the size of their workforce unchanged.
Asked about which workers they are having the most difficulty recruiting, 28 percent say unskilled workers, 56 percent say semi-skilled, 50 percent say skilled and 34 percent say professional.
Only one in five CEOs say that the local workforce has access to training for relevant skills their company will need over the next five years. Over half say that training is available for some but not all positions that they require.
Looking to the year ahead within their own industry 40 percent expect conditions to improve while 39 percent anticipate conditions to worsen. CEOs in engineering/construction and food/beverage are most pessimistic.
Thirty-four percent of CEOs, down from 41 percent last year, expect revenue growth in the coming year, while 25 percent, down from 34 percent last year, expect growth in profits. And only 41 percent, down from 51 percent, of upstate CEOs plan to invest in fixed assets in 2021.
“CEOs across upstate have faced an incredibly difficult year for business. Economic conditions have been difficult for all, devastating for some,” Levy said. “At present despite the depths of the COVID-19 declines, only about 40 percent express hope in a 2021 recovery but their guarded optimism may grow as stimulus money permeates the economy, vaccinations take place and pent up consumer demand is expressed.”
Sixty-one percent of upstate CEOs expect their company to still be in business in 10 years. But, more than half, 52 percent, say if they had to do it again, they would not locate their business in New York state.
The poll was conducted January through March by mail and internet interviews with 1,036 business leaders from across upstate including the Capital Region, Central/Mohawk Valley New York, the Finger Lakes region, the Mid-Hudson region, the Southern Tier region, Westchester and Western New York.