Results of the 17th annual Upstate New York Business Leader Survey by the Siena College Research Institute show that business chief executives are thinking pessimistically about what’s in store. A total of 585 CEOs at companies throughout Upstate New York took part in the survey and 67% said that business conditions are getting worse. Only 18% of the CEOs said they expect the economy to improve in 2024.
The survey was conducted in partnership with UHY, a professional services firm, and the Hudson Valley Economic Development Corp. (HVEDC). Siena College Research Institute Director Dr. Don Levy presented results of the survey at this year’s HVEDC CEO Survey Breakfast held at the Franklin D. Roosevelt Presidential Library and Museum in Hyde Park.
“Despite increasing consumer sentiment, lessening inflation and recent stock market gains, the CEOs of Upstate New York are decreasingly positive about business conditions and fewer than one in five expect a rebound this year,” Levy said. “Troubled by the lack of suitably trained workers and feeling as though neither the federal or state government contribute to their success, CEOs expect a year of lower revenues and profits.”
Twenty-nine percent of the CEOs plan to increase the size of their workforce this year, but 80% say that there is not an ample supply of appropriately trained local workers. For the second consecutive year, 75% of the CEOs said they were having difficulty recruiting for open positions.
Eighty-one percent of the CEOs said that state government is a detriment to doing business in New York. Only 11% think the government of New York is doing either an excellent or good job of creating a business climate in which companies like theirs can succeed. Only 14%, down from 17% a year ago, expressed confidence in the ability of New York’s government to improve the business climate over the next year. Only 21% of the CEOs saw local government as an asset for their businesses.
Nearly 90% of Upstate CEOs said that the federal government is doing no better than a fair or poor job of creating a business climate in which they can succeed. They said they are not very confident in the ability of the federal government to improve business conditions.
The Research Institute annually computes an Index of Business Leader Confidence. An index score of 100 represents a breakeven point at which optimism and pessimism are balanced. Two years ago, the Upstate index was at 94.4. Last year, the index fell to 68.8. This year, the index is 60.8 – the lowest measurement since the all-time low of 39 in 2008. Still, this year’s score was 17 points above the 2020 score, recorded during the Covid pandemic.
“With the index falling to its lowest level since 2008 amidst the Great Recession, CEOs are speaking loudly and clearly. They feel conditions ranging from a lack of governmental support, difficulty filling open positions and increasing costs in healthcare, energy and insurance all are making it more difficult for New York’s businesses to succeed. With consumer sentiment increasing, it is possible that next year, these CEOs may report a 2024 that was better than at present they predict,” Levy said.
The CEOs identified technology, education, tourism, medical and manufacturing as the top growth areas for the next three to five years.
“CEOs not only predict technology will have a positive impact on the economic vitality of their region, but many are beginning to adopt disruptive technologies, including not only the cloud or cyber security, but also artificial intelligence, 5G, the internet of things, Chat GPT and digital analytics,” Levy said.
This year, 50% of CEOs, down from 55% last year, said they intend to invest in their company’s fixed assets to meet growing demand, reduce costs or enhance profitability. One-third of CEOs said that they will focus on market and demand growth this year in order to enhance profitability, while 31%, virtually unchanged from last year, will focus on price increases. The percentage of CEOs focused on cost reductions is down slightly this year to 20%, compared with 22% last year.
When asked what they thought could improve the business climate in New York, 61% called for business tax reform, 60% said spending cuts, 59% called for personal income tax reform, 48% said there should be more workforce development and 44% said there should be infrastructure development.
According to Heather Mulligan, president and CEO of The Business Council of New York State, “Our business sectors are seeing high taxes, strict mandates, and little cooperation from lawmakers, forcing them and their employees out of New York state.”
Michael Oates, president and CEO of HVEDC sad, “Dr. Levy’s comprehensive presentation offered timely, meaningful and actionable intelligence from a broad swath of the industries most vital to the Hudson Valley and New York state economies.”
