Poll: 43% Of Upstate CEOs Expect Economy To Be Worse In 2021
New York state has recovered fewer than half of the jobs lost in the early stages of the COVID-19 pandemic.
Data released recently by the state Labor Department showed employment is still more than 1 million jobs below its pre-pandemic levels. In February 2021, total non-farm employment in New York increased only slightly, by a net of 3,700 jobs, compared to a net 45,300 jobs added in January. The leisure and hospitality sector has added the greatest number of jobs, nearly 260,000, while the construction industry is farthest along in its recovery, regaining 74 percent of jobs lost.
A poll released Friday by the Siena College Research Institute, sponsored by the Business Council of New York State, sheds a little light on the state’s sluggish jobs recovery.
Eighty percent of Upstate CEOs say economic conditions in New York state have worsened since the beginning of the coronavirus pandemic. Looking forward from today through the balance of 2021, 40% expect conditions to improve while 17% expect conditions to remain the same and 43% believe conditions will grow worse, according to the 14th annual Upstate New York Business Leader Survey.
“The results of this survey come as no surprise and underscore the important message the Business Council has been amplifying for months: New York state is in a critical position as a result of the pandemic,” said Heather Briccetti, president and CEO of the Business Council of New York State. “Unfortunately, the recently agreed-upon state budget and business tax increases do not help, and only create more harm to private sector employers. It’s crucial state lawmakers take notice of these continued roadblocks to recovery before the opportunity of a full economic turnaround are gone.”
According to the poll, 75% of CEOs say COVID-19 has increased their cost of doing business while two-thirds say the pandemic has decreased their revenue and profits, and half say it has reduced the demand for their product or service.
“Predictions and plans for 2020 were instantly discarded as dealing with the pandemic became the number one concentration and challenge for Upstate CEOs,” said Siena College Research Institute Director Don Levy. “Despite its devastating effects, nearly 40% of CEOs expect to emerge from the pandemic as a stronger business well positioned to be successful while half think they will survive and return to where they were before the virus hit. Unfortunately, one in seven say that they may or may not survive.”
Only 12% of CEOs (up from 6% a year ago) give state government a grade of either excellent or good on creating a climate to help businesses succeed. Slightly more, 20%, are confident in the ability of state government to improve the business climate. They call on the governor and legislature to provide business and personal tax relief, to cut spending and to fund business development incentives and infrastructure. Nearly 60% of CEOs cite governmental regulation and taxation as among their top challenges.
Seventy-five percent of CEOs have received federal money to assist them in either keeping their business open or to adapt to COVID-19 requirements. Three-quarters cite the continuing impact of COVID-19 as the top challenge they face in 2021. Nearly half, 47% are satisfied with New York’s management of the pandemic while 40% are satisfied with the federal government’s response. Looking forward, 46% are confident in the state’s management of the crisis while 53% are now confident in the federal response.
“Many CEOs were hit hard by the pandemic’s effects. Revenues, profits, and demand were down and costs were up including 62 percent saying that COVID-19 safety measures had a significant financial impact on their business,” Levy said. “Forty-percent think that state restrictions were too strict but more, 58 percent believe the state’s restrictions were about right. In response to the pandemic, CEOs had to change many of the ways that they do business.”
Fifty-seven percent have increased the ability for their employees to work from home and 48% of those plan to keep this change indefinitely. Thirteen percent have reduced their office space and 42 percent have increased technology support for their employees and 47 percent have increased technical security measures.
“Some have identified opportunities amidst the pandemic. Forty-five percent of all CEOs and over half of those that expect to emerge from the crisis stronger, have added new COVID-19 specific products or services,” Levy said.
Poll results show 28% of CEOs, up from 21% a year ago but down from 51% in 2013, say that there is an ample supply of local workers that are appropriately trained. CEOs’ perception of there being an ample supply of trained workers does not exceed 37% in any region of Upstate or 50% in any industry group.
Over the course of this year, 48% of CEOs reduced the size of their workforce but less than 30% plan to make that reduction permanent. Looking forward from today, 27% plan to increase their workforce while the majority, 62% plan to keep the size of their workforce unchanged. Asked about which workers they are having the most difficulty recruiting, 28% say unskilled workers, 56% say semi-skilled, 50% say skilled and 34% say professional.
One in five CEOs say that the local workforce has access to training for relevant skills their company will need over the next five years. More than half say that training is available for some but not all positions that they require. One-third of CEOs in manufacturing, food/beverage and wholesale/distribution say that the local workforce does not have access to training for the skills their company needs.
Looking to the year ahead within their own industry 40% expect conditions to improve while 39% anticipate worsening conditions. CEOs in engineering/construction and food/beverage are most pessimistic
Thirty-four percent of CEO’s, down from 41% last year, expect revenue growth in the coming year, while 25% down from 34% last year, expect growth in profits. And 41%, down from 51%, of Upstate CEO’s plan to invest in fixed assets in 2021.
“CEOs across Upstate have faced an incredibly difficult year for business. Economic conditions have been difficult for all, devastating for some,” Levy said. “At present despite the depths of the COVID-19 declines, only about 40 percent express hope in a 2021 recovery but their guarded optimism may grow as stimulus money permeates the economy, vaccinations take place and pent up consumer demand is expressed. While many express frustration with not only the pandemic’s effects but also with what they see as a lack of business friendly policies coming from Albany, 61% predict that their company will be in business in New York 10 years from today.”