Upstate business officials don’t think the economy is in great shape, but they’re feeling better about their prospects – and efforts to improve the business climate here – than they were as the Great Recession was ending, pollster John Zogby said Tuesday.
An unscientific survey of upstate businesses, conducted for the Accelerate Upstate conference held Tuesday in Buffalo, found that better than three of every five business people responding to the email questionnaire believe their firms are better off or the same as they were, Zogby said.
But the executives surveyed still had widely different views on the outlook for the state’s economy. While 36 percent of the business officials responding to the survey believe New York is headed in the right direction, 31 percent said the state was heading in the wrong direction.
While the results show there are large pockets of negative sentiment among upstate business officials, Zogby said the survey indicates that a modest wave of optimism has swept through the upstate business community since the recession ended. Zogby said the results would have been much more negative if the survey had been taken two or three years ago.
“The results that we would get from a survey like this would have been extremely negative: That it was not good and that it was not improving,” Zogby said.
The survey, conducted in mid-January through a questionnaire emailed to members of upstate Chambers of Commerce, was heavily weighted toward Western New York, with nearly three of every four responses coming from a wide swath that included both the Buffalo or Rochester areas.
The survey shows that most of the executives responding said their firms had increased their capital investments upstate over the past five years and plan to continue spending more over the next five years.
Yet the survey also revealed that job growth, which has been sluggish upstate since the recession ended, is likely to remain depressed, with just 11 percent of the firms surveyed expecting to add jobs over the next five years.
And the survey also showed that upstate executives continue to list taxes and health care costs as the two biggest problems facing their businesses, followed closely by what they feel is an excessive regulatory burden.
The survey shows “why we need reform and why we need it faster,” said Brian Hickey, an executive vice president for M&T Bank, which financed the survey. “It sends a strong message about what we need to accomplish in upstate New York.”
Those concerns are reinforcing the belief that New York remains a costly place to do business. More than three of every four executives responding to the survey said they believed it would be easier for their business to be profitable if it were located in another state.
As a result, nearly three of every 10 executives said the most important step that government could do to help business would be to cut taxes. Nearly one of every five executives called for the elimination of overlapping layers of state and local government as a way to reduce costs.
“I drove here from Utica, and I must have gone through 200 school districts and 150 police departments,” Zogby said. “It’s not just the cost of doing business, but it’s the talent pool. You really dissipate the talent pool when you spread it over that many entities.”
Andrew J. Rudnick, the president of the Buffalo Niagara Partnership, which organized the conference as a follow-up to an event it sponsored in 2011 for seeking ways to improve the upstate economy, said he believes progress has been made over the past 18 months, especially with Albany’s efforts to control spending and the formation of regional economic development councils across the state.
“I do believe there is law and order in Albany,” Rudnick said. “But it ain’t enough. It’s not just how you organize and develop a system to deliver economic development resources. It’s how you develop an improved business climate.”
Lt. Gov. Robert Duffy, who spoke during the conference, said he believes the state has given a “rudderless” economic development system a new sense of purpose, although he said there still is plenty of room for improvement.
Duffy said the property tax cap was “a huge step” toward stabilizing the burden on homeowners and businesses, but he also conceded that reforming the state’s regulatory structure will take time.
“It’s like chopping down a tree,” he said. “You don’t chop it down in one swing. You keep hitting it and hitting it.”