Across Upstate New York, CEO confidence fell by over 6 points this year, demonstrating less optimism than pessimism among leaders of private, for-profit companies. This is according to the 11th annual Upstate New York Business Leader Survey from Siena College Research Institute sponsored by the Business Council of New York State.
The Confidence Index of Business Leaders, computed based on interviews with 462 business leaders of companies from Buffalo, the Capital Region, Rochester and Syracuse stands at 97.1, down from 103.8 last year. Being below the break-even point of 100 means that overall optimism and pessimism towards the current and future economic conditions are not balanced. Current confidence was virtually unchanged from a year ago, but confidence in the future among Upstate business leaders fell by close to 14 points.
“Across Upstate, business leader confidence dropped just below the magic break-even point this year. Compared to last year at this time, CEOs are just not as optimistic as they head into a new year.” Said Siena College Research Institute Director, Don Levy.
Driven primarily by decreasing confidence in the future, the Capital Region’s overall index was down 4.6 points, to 107.9.
Buffalo fell 18.7 points, to 87.6 and Syracuse decreased 1.4 points, to 100.0.
Rochester increased 4.7 points, to 93.4.
Nearly half of CEOs expect revenue growth in the coming year, while 39% expect growth in profits. Both of these numbers are down slightly from last year when 51% expected greater revenue and 43% expected increased profitability.
More companies plan to hire rather than fire – 37% intend to increase their workforce compared to 9% that plan on decreases. And 56% of Upstate CEOs, up from 51% a year ago, plan to invest in fixed assets in 2018.
41% (up from 39%) of Upstate CEOs now say that if they had it to do all over again, that they would locate their business in New York and 65% expect their business will be in business in New York in 10 years.
Buffalo CEO Confidence
The overall index for Buffalo fell 18.7 points from last year to 87.6. Current confidence at 87.4 is down 9 points while future confidence at 87.8 is down by over 28 points.
48% of CEOs expect revenue growth and 37% anticipate increases in profitability. More than half, 56%, intend to invest in fixed assets over the coming year and more than a third, 39%, plan to increase their workforce.
Buffalo CEOs name the Medical sector most often as the single industry that will have the greatest impact on the area’s economic vitality in the next 3 to 5 years (click to tweet this stat). 45% describe the workforce suitability as either excellent or good.
Views of Government
CEOs cite health care costs (78%), governmental regulation (61%) and taxation (61%) as challenges that they are concerned about. 29% of CEOs (up from 19%) think local government is doing either an excellent or good job supporting business and only 16% (up from 15%) are confident in the ability of New York’s government to improve the business climate.
But this year, with a full year under the new administration in Washington, confidence in the federal government’s ability to improve business conditions rose again from only 7% in 2015, 32%t in 2016, to 39% today.
“This year’s survey shows the dramatic impact specific policies have on Upstate business leaders and highlights their ability to recognize the difference between actions in D.C. and those by the state,” said Heather C. Briccetti Esq., president and CEO of The Business Council of New York State, Inc. “Despite a strong national economy, survey respondents know that upstate is in many ways being left behind. Increased state-level mandates and regulations are clearly having an impact on employers’ outlook and their ability to create jobs, and this survey demonstrates that changes are needed before upstate New York employers will be willing to expand their workforce.”
Nearly half of Upstate CEOs are familiar with ‘Disruptive Technologies’ and 73% see them as an opportunity rather than a threat to their business. While most currently utilize the internet in their business, very few use (or plan to use) knowledge automation, 3-D printing, advanced robotics, or autonomous vehicles.
Additionally, less than a quarter describe themselves as very innovative in production, marketing, information processing, physical space utilization, employee benefits, or employment arrangements.
*** The Buffalo Niagara Partnership was proud to host Siena College Research Institute and The Business Council of New York to dig into the survey data at our annual CEOs Speak event on February 7, 2018. The event included a panel discussion featuring:
- Heather Briccetti is the President & CEO, The Business Council of New York.
- Steve Davis, President, Tapecon and a Partnership Board member
- Julie Dotton, President &CEO, Applied Sciences Group and a Partnership Board member
- Michael Newman, Executive Vice President, NOCO Energy Corporation and a Partnership Board member
- Christina Orsi, Associate Vice President for Economic Development, University at Buffalo
Thank you to the event’s Presenting Sponsor Tompkins Bank of Castile.