More than 90 percent of Long Island CEOs think government does a poor to middling job of helping business, although more than half still think the region is a good to excellent place to soldier on in, according to a new survey.
Sponsored by the LIA and conducted by the Siena College Research Institute, the survey suggests that seven in 10 business leaders believe the region’s high cost of living, traffic congestion and lack of affordable housing are also impediments to growth.
Only 13 percent of respondents thought business conditions on the Island were improving.
Nonetheless, the survey’s confidence index, based on interviews with 248 business leaders of local companies with at least $2.5 million in annual sales, was 107.8, well above the breakeven point of 100 at which overall optimism and pessimism are balanced.
Overall, the CEO expected strength in revenues, profitability, asset acquisitions and hiring during 2016.
“The spring is in the step of many of Long Island’s CEOs,” said Siena Institute Director Don Levy. “Another upbeat indicator – 46 percent plan to invest in equipment, vehicles, and computers this year.”
One potential flaw in the survey is its timing. The poll was conducted during the fourth quarter of 2015, before oil prices, currency valuations and concerns about the Chinese economy began to hammer the U.S. equity markets. As the survey was released Wednesday, the Dow Industrial Average was down almost 500 points, continuing a rout that has trimmed stocks by more than 8 percent since the start of 2016.
Those worries have already led local economists to reduce their assessments of the local economy’s growth, from 2 to 2.5 percent to as little as 1 percent. It likely has had a similar impact on CEO confidence.
Even without geopolitical concerns and a bear market, local CEOs said rising costs are hampering efforts to grow their businesses. Seventy-two percent said the Affordable Care Act is having a negative effect, with 44 percent saying they are decreasing benefits to cut costs. More than a third said they have begun to offer defined contribution health insurance, 27 percent are hiring more part time employees and 19 percent are reducing the number of hours employees work as a result.
And then there’s the concern about government. Ninety-two percent of CEOs ranked local government as no better than fair and 61 percent gave it a poor rating. Only 4 percent of respondents felt the federal government was doing a good job.
“In many ways these CEOs say that they are succeeding for many and carrying on for others, despite rather than because of governmental support,” Levy noted.
Long Island Association President Kevin Law said his organization would use the survey results to help steer the group’s lobbying efforts.
“Despite the many challenges Long Island businesses are confronted with, including the high cost of doing business in our area, it is encouraging to see a majority of our region’s CEOs are optimistic about their businesses and the overall economy and that Long Island is still a good place to locate, conduct and grow your business,” Law said.
Asked to name the sectors that would have the most impact on the local economy, CEOs listed technology (67 percent), medical (61 percent) and biotechnology (45 percent) with tourism and clean energy both at 43 percent.