Nearly Half of Capital Region Firms Expect Business Increase in 2011
Marvin and Company/University at Albany School of Business announce results of the 25th Annual Business Climate Survey
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The Annual Business Climate Survey tracks the economic projections of Capital Region businesses. (Photo Mark Schmidt)
ALBANY, N.Y. (February 18, 2011) --
Nearly half of Capital Region firms expect business to increase in 2011, while more than nine out of 10 regional businesses expect their employment levels to increase or level off, according to 25th Annual Marvin and Company/University at Albany School of Business Climate Survey.
Forty-two percent of area firms saw an overall increase in their business in 2010, the highest percentage in three years, while 49 percent of businesses believe they will see increases in 2011.
Although fewer than half (43 percent) of area businesses categorized the current economy as recovering or prospering, a clear majority did not project losing employees in 2011; 94 percent expected their employment levels to remain stable or increase, an employment outlook that rose 4 percent over 2010. Those businesses that expected to increase their workforce reported an expected aggregate gain of 648 full-time jobs and 374 part-time jobs.
When asked how they expected the region's economy to perform over the next several years, businesses were cautiously optimistic; 37 percent expected it to prosper, a percentage that topped the 35 percent of 2010 and a 7 percentage-point increase over 2009. Supporting the guarded optimism, the 43 percent that expected little or no growth this year represented a reduction from last year's 45 percent.
The survey, compiled by Marvin and Company and the University at Albany School of Business, shows more than half the area firms are in the small-business category with gross sales under $1 million, while 17 percent expect more than $5 million in sales. Most area businesses were in service, professional services, or retail. In order to offer the best barometer, Marvin and Company and the UAlbany School of Business compile the business climate survey in conjunction with local chambers of commerce to discern the concerns and projections area businesses have for the year ahead.
"At a time of great concern regarding job creation and destruction in the private sector, it is heartening to report that 94 percent of businesses in the Capital Region expect employment levels to rise or remain constant," said Dr. Donald Siegel, dean of the University at Albany School of Business. "We also see strong evidence that public and private investment in Tech Valley, focused mainly at the University at Albany, is starting to benefit private firms in our region. These research findings bode well for our future economic performance."
"As has been true over the 25 years of the survey, local businesses have a very positive outlook on the regional economy as well as the success of their own business. The percentage that believe the economy is recessionary has dropped almost 50 percent in the last two years, from 28 percent to 15 percent," said Kevin J. McCoy, CPA and director, Marvin and Company.
Regional firms are beginning to feel the boost from the growth of technology-based businesses in the Capital Region. Twenty-four percent cite the technology sector as having a significant or moderate impact, a slight increase from 2010's 22 percent, which itself was an increase over 2009. While nearly 29 percent of respondents cited the technology sector as having "no impact at all" on their business, the figure was down from 2010's 32 percent.
For the 15th time in 16 years, local businesses ranked the cost of health care as their primary concern. The doldrums of the national economy earned a No. 2 ranking, while taxes and government regulations followed in the third and fourth spots. Lower on the list of concerns were finding qualified employees (8), transportation (9), and security issues (10).
To safeguard their businesses from downturns in the economy, regional owners took several measures, including freezing salaries (1), finding news ways to manage cash flow (2), and reducing staff (3).
Now in its 25th year, the survey was developed to respond to the chambers and prospective clients seeking to assess the regional business marketplace and how it will affect their contracting, expanding and hiring. With an approximately 6 percent return rate, the survey offers valuable insights that can be used by Marvin and Company, the chambers, economic developers, government leaders and businesses.