Business leaders in upstate New York are getting more confident about economic conditions, with those in the Buffalo Niagara region even more upbeat than their counterparts in Rochester, Syracuse and Albany, according to a new survey.
Private-sector leaders in Western New York have higher expectations for 2012 for revenues, profits and new-worker hires than those in the other upstate cities, according to an annual survey of upstate New York business leaders, sponsored and released Tuesday by First Niagara Financial Group.
They are also slightly more optimistic than in other cities about overall business conditions this year, the survey found.
"Leaders of Buffalo Niagara area businesses are showing rays of optimism in an uneven economic period, and they continue to demonstrate an acute realism in projecting their future revenues, profits and company investments in this post-recession world," said Buford R. Sears, the bank's Western New York market executive.
Exactly 1 in 3 Buffalo Niagara business leaders said they expect business conditions in the state to improve this year, up from 31 percent a year ago and 25 percent in early 2009.
Forty percent expect the same conditions, while 27 percent say conditions will worsen, down from 37 percent last year and 46 percent in 2009.
"Buffalo leads the way across the four areas of upstate New York," said Donald P. Levy, director of the Siena College Research Institute, which conducted the survey for First Niagara. Levy speculated that the survey reflects a larger and more diverse economy in Buffalo, compared with the other cities and the past. "There are more businesses, and what you see in Buffalo are more opportunities," he said.
He also wondered whether attitude plays a big part. "Buffalo Niagara is kind of funny in some ways. The CEOs in Buffalo, although they'd like a better economy, they're a little more open for doing business than the other three regions," Levy said. "Maybe the CEOs in Buffalo are tougher than other ones."
Across the state, 34 percent of business leaders expect improving conditions, while 28 percent expect them to worsen. That's the lowest negative tally in five years and is down sharply from the high of 72 percent in 2008. Thirty-eight percent expect conditions to stay the same.
Business leaders also plan to proceed with caution in the "new normal" environment, as their forecasts for revenues, profitability, work force size and acquisitions of fixed assets remain similar to a year ago.
"The good news is that many business leaders continue to express more favorable expectations for their business operations and overall business conditions, compared to where they were two and three years ago," said First Niagara's upstate New York regional president, Peter K. Cosgrove.
"With a focus on business stability, these company leaders are telling us that 2012 may look more like 2011 and that conditions point to a less than robust economic recovery."
At the same time, upstate business leaders say they're not confident in the ability of state government to improve the situation, although their faith in the state has increased from last year, while confidence in the federal government has fallen. Twenty-one percent are at least somewhat confident in the state, up from 7 percent a year ago, while only 9 percent believe in the federal government, down from 12 percent.
The survey, conducted for the last five years by Siena on behalf of the bank, gathered responses from 636 business leaders in the four major upstate cities, including 199 business leaders in Western New York.
Respondents included chief executive officers, chief financial officers and other senior managers of private businesses with $5 million to $150 million in annual sales in the service, manufacturing, engineering and construction, retail, wholesale and distribution, financial, and food and beverage sectors.
"We find these survey results to be a reflection of what our customers are dealing with every day across upstate New York," Cosgrove said. "They are looking to grow their businesses but know they must have realistic financial expectations, given what they have endured in recent years."
The 26-question survey was conducted in the last two months of 2011 and the first week of 2012. It occurred before Eastman Kodak Co.'s bankruptcy filing in Rochester and prior to Gov. Andrew M. Cuomo's pledge of $1 billion in economic-development aid for Buffalo over five years.