The Business Council of Westchester”™s second-quarter economic survey suggests the dark days continue for businesses here though the prevailing gloom has lifted slightly from three months ago.
About 150 member businesses responded to the June survey conducted by the Business Council and DataKey Consulting L.L.C. of Mount Kisco. One in 10 owners said they will probably have to close their businesses if the economy does not improve by January 2011, while another 28 percent said they will be severely impacted if the recession lasts another 18 months.
On the brighter side, half of businesses have slightly better profit and revenue projections for the next six months than they did three months ago. The share of owners projecting higher revenue and profits was up 19 percent from the Business Council”™s first-quarter survey.
A little more than half of businesses surveyed this month said they had the same number of job openings as in the first quarter, while 38 percent had fewer openings and just 7 percent were doing more hiring than three months ago.
Another key indicator of business health, capital spending, will be the same or higher over the next six months compared with three months ago for a little more than half of the businesses. The share of owners planning to maintain or increase their capital budgets was up 9 percent from the first quarter.
Based on those second-quarter indicators, “The overall sense I get is that companies are still hurting but they”™re hurting less than they were three months ago,” said Business Council President and CEO Marsha Gordon. “Businesses are still very weak and challenged, but they”™re beginning to stabilize.”
Three out of four businesses said they have cut expenses in response to the softening economy, while four out of 10 have reduced staff or cut their staff”™s work hours.
Of those businesses that still expect to see growth if the recession extends through 2010, six out of 10 said they had increased both their networking and marketing activities. Nearly as many, 57 percent, had developed new products or service offerings.
In contrast, 30 percent of owners that expect to be severely affected by a prolonged slump have developed new products or service offerings to counter the downturn.
“Those businesses that continue to innovate and continue to look for new products and services generally are doing better,” said Gil Yee, senior consultant at DataKey who prepared the second-quarter report.
Significantly more business owners in June showed confidence in their industry”™s rebound over the next six months than the Business Council saw three months ago. About 55 percent thought their industry will perform better over the next two quarters, up 20 percent from last quarter.
Business owners, though, showed a slight drop in confidence about Westchester”™s economic condition over the next six months relative to nearby New York, New Jersey and Connecticut counties. About 57 percent said they expect Westchester to hold its own or fare better than its tri-state neighbors compared to three months ago, a 5 percent decline from owners”™ first-quarter confidence in their county of business.
“That”™s not a lot,” Gordon said of that decrease, “but it”™s something we will keep watching.”
