What a difference a year has made in Westchester”™s business outlook. So The Business Council of Westchester found in a recent post-election survey of its members. Most of those businesses, basking in prospects for profitable growth a year ago, now are shadowed by the nation”™s prevailing economic doom and gloom.
More than six of 10 of those surveyed business owners and executives gave failing grades to the federal government for its handling of the financial crisis. Many, however, expect President-elect Barack Obama to have a favorable impact on their companies.
“There”™s been a marked change in the mood of business in Westchester,” said Marsha Gordon, Business Council president and CEO, assessing the results of the November survey. She said it is the first of quarterly surveys the 1,200-member Business Council will conduct in conjunction with DataKey Consulting, a Mount Kisco firm, “to understand the pulse” of the county”™s business community.
The pulse of business has weakened for many of the more than 200 survey respondents. In November 2007, 94 percent of surveyed companies projected growth in the next year. By contrast, 39 percent of businesses last month projected growth for the coming year, while 61 percent expect their companies to be flat or see declining growth in the next year, said Ted S. Miller, founding president of DataKey Consulting and a vice chairman of the Business Council executive board. Â
Miller noted that small companies of 30 or fewer employees are about 60% more likely to project growth for the next year than mid-sized and large companies. And four of 10 small- business owners reported the economic crisis has not yet had an impact on their businesses. Nearly nine of 10 large and mid-sized companies, 87 percent, said they already have felt that impact, he said.
The relative health of small Westchester companies could be because larger companies still are using their professional services ”“ in design, printing and accounting, for example, Miller said, though the projects for which they are used might be fewer and companies employing their services are demanding higher returns on their investment. With small companies making up “the lion”™s share” of business nationally and in Westchester, “That”™s sort of good news,” Miller said.
Looking at the up side of the current crisis, Gordon said some business are finding opportunities for mergers and acquisitions, new business alliances and an abundance of formerly scarce talent now available in the job market. “Businesses are telling us every day that there are opportunities not just to survive, but to thrive,” she said.
Companies projecting growth in the coming year see this as “a terrific opportunity because there are some terrific people who are available” for hire, Miller said. Companies also are looking to claim a greater market share in the downturn, he said.
Three out of four businesses surveyed said the recent federal bailout legislation will not assist their companies. Of the 25 percent who believe their businesses will be helped by the bailout, about one in three, 35 percent, thought it would begin to open frozen credit markets and one in four thought it would reassure consumers and so help stimulate spending.
Only 4 percent of businesses felt the federal government has handled the crisis well, while 62 percent said it has performed poorly. Another 32 percent said federal officials handled the situation “reasonably well.”
Half of businesses surveyed said the effects of the financial crisis will continue for one to two years, while 40 percent said the fallout will be felt for two to four years. Only 10 percent of those surveyed said the impact would last less than a year.
About seven of 10 respondents, 71 percent, said Obama”™s presidency will have a favorable impact on their companies. About 18 percent felt he would have a negative impact on their companies as president.
Gordon said Obama”™s election seems to be “encouraging a lot of hope” among business leaders. Asked about the most positive aspect of an Obama presidency, 36 percent cited strong leadership and government that would instill hope and confidence.
Asked about the most negative impact of the incoming president, nearly half of business leaders, 47 percent, cited additional taxation that would impact their businesses and customers.               Â
Among businesses surveyed, “There”™s a lot of wait-and-see going on,” Miller said. “That”™s not a positive predictor because wait-and-see means everyone”™s slowing down their investments.”
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