Business executives in the Hudson Valley/Westchester region appear to be following their counterparts in Upstate New York in expressing less confidence in the 2013 state economy while adopting a cautious outlook in projections for any new hires, revenues and profits, according to results from First Niagara’s Sixth Annual Survey of Upstate New York Business Leaders released today.
Overall, the survey conducted by the Siena College Research Institute found 1,142 leaders of private companies in 55 counties, those outside New York City and Long Island, to have taken a step back in their confidence levels regarding current and future economic conditions after three years of increasing optimism following the 2007-2008 recession.
This is the first year the survey was expanded to include responses from business leaders in all 55 counties, including the Hudson Valley/Westchester region represented by Columbia, Greene, Dutchess, Orange, Putnam, Rockland, Ulster and Westchester counties.
This resulted in 199 responses this year from chief executive officers, chief financial officers and other senior managers of private businesses in the Hudson Valley/Westchester region with $5 million to $150 million in annual sales in the service, manufacturing, engineering and construction, retail, wholesale and distribution, financial and food and beverage industries.
“The entire survey shows many company executives have taken a step back in their confidence levels, compared to recent years, as they continue to operate their businesses in the ‘new normal’ while waiting for a more robust economy,” said David Ring, managing director of Enterprise Banking for First Niagara Bank. “Business leaders from the Hudson Valley/Westchester region mirror that outlook. However, it is very important their companies remain focused and prepared in the event higher consumer confidence and spending forecasts become a reality in 2013.”
In particular regarding that outlook, just over one-quarter, 27%, of Hudson Valley/Westchester business leaders say they expect business conditions for the New York State economy to improve in 2013. Another 35% expect conditions to remain about the same in 2013, and 38% say business conditions will worsen.
Each year the First Niagara survey uses an overall Confidence Index as a measure of business leaders’ current assessment of and future expectations for economic conditions regarding the state economy and their specific industries. The index is based on a scale of zero to 200 with zero being the most pessimistic and 200 being the most optimistic. An index of 100 would be the breakeven point with an equal percentage of negative and positive responses.
The survey report provides three confidence indices for the current assessment, future expectations and overall as a combination of the two. This year, Hudson Valley/Westchester business leaders ranked fourth with an overall Confidence Index of 83.5 out of five regions that also included Albany, Rochester, Syracuse, and Buffalo. Hudson Valley/Westchester business leaders also registered a current Confidence Index of 78.1 and a future Confidence Index at 88.9.
Other key survey results for Hudson Valley/Westchester business executives include:
• One-quarter, 25%, of Hudson Valley/Westchester business leaders say current business conditions in New York State were a little better or considerably better at the end of 2012 compared to six months earlier. Another 36% say conditions were about the same and 39% say they were a little or considerably worse.
• 27% of area business leaders say they expect business in their own industries to be a little better or considerably better in 2013, compared to 35% who say it will be the same and 38% who say it will be a little or considerably worse.
• Almost one-fifth, 19%, of Hudson Valley/Westchester company leaders say they expect in 2013 to increase their current labor force, while 64% say it will remain the same in 2013 and 16% say they will decrease their work force.
• 47% of local business leaders say they plan to invest in fixed asset acquisitions over the next year – with another 11% unsure -- to meet growing demand, reduce costs or enhance profitability. Of those who intend to invest in fixed assets, 45% plan to use internally generated funds while 43% intend to finance with the assistance of a financial institution.
• 37% of Hudson Valley/Westchester business leaders predict increasing revenues in 2013, while 32% think they will stay the same and 31%, say they will decrease.
• 27% of Hudson Valley/Westchester business leaders expect profits to increase in 2013 while another 35% predict they will stay the same and 37% expect a decrease.
• Market growth/demand at 40% was cited as the foremost strategy business leaders will employ to enhance profits, followed by cost reduction (29%), price increase (14%) and new technology (8%).
• Overall, the number one challenge concerning Hudson Valley/Westchester business leaders is governmental regulation (22%), followed by adverse economic conditions (20%), taxation (13%), and health care costs (12%) and cash flow (12%).
Results from the sixth annual First Niagara Survey of Upstate New York Business Leaders are available at www.siena.edu/sri/upstatenybusinessleaders2013.
A quantitative 26-question survey was conducted through the 2012 fourth quarter for First Niagara by the Siena College Research Institute (SRI) in which 1,142 business leaders from 55 counties responded either by mail, on the SRI Web site, or through a personal interview.
Included were chief executive officers, chief financial officers and senior managers of private businesses with $5 million to $150 million annual sales in the service, manufacturing, retail, engineering/construction, wholesale and distribution, financial and food/beverage industries.