Confidence remains on the ropes

Business confidence dropped in Westchester in the first quarter of 2010 from the fourth quarter of 2009, yet remained significantly higher than its low point in late 2008, according to the latest quarterly economic survey from The Business Council of Westchester.

Nearly 150 CEOs and business leaders responded to the survey conducted by DataKey Consulting L.L.C. in Mount Kisco. The survey tracks business trends over a period of months and years and includes an overall business confidence rating based on key business metrics, such as trends in staffing levels, top line revenues, bottom line profits and capital spending budgets.

The Westchester confidence index dropped from 52 in the fourth quarter last year to 47 for the first quarter this year. The confidence index reached a low of 27 in December 2008 and ranged from 30 to 41 during the first three quarters of 2009.

DataKey analysts said revenue projections over the next six months are relatively flat compared with three months ago, with an equal number of business owners, 37 percent, anticipating growth or decline. Yet nearly three-fourths of companies expect the same or more profit during the next six months because of well-managed budgets and business expenses.

Business owners have learned that actively managing expenses is critical as borrowing capital still is difficult. Of business owners surveyed, 95 percent who tried to obtain business credit found it is harder or there has been no change compared with six months ago.

The federal stimulus package has benefited few Westchester businesses, the survey found. About 85 percent of business owners said they have felt no impact from American Recovery and Reinvestment Act programs. Of the 15 percent that did find it helpful, a majority found the stimulus only “somewhat” helpful.

“Small-business owners have been ignored,” the owner of a small engineering firm was quoted from the survey. “All talk and no action.”

The survey found 76 percent of companies plan to lower or keep their capital-spending budget the same compared with three months ago. Yet 71 percent of companies expect the performance of their industry to remain the same or increase over the next six months.

An almost equal number of companies, 23 percent, report increased confidence in their business compared with 22 percent who have seen their confidence decline from three months ago.

Business owners indicated it is time for state government to do as they have done in managing expenses and operating with tighter margins in the economic downturn. Of those surveyed, 87 percent said they want Albany to cut spending.