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Local executives guarded about economy

William Pottle has a good feeling about where the Buffalo Niagara economy is headed.

Pottle, the national sales manager at Boston Valley Terra Cotta, said the Orchard Park architectural ceramics firm is seeing more opportunities for business locally, thanks to the spurt of big construction projects in the region, from the Buffalo Niagara Medical Campus to Delaware North Cos.’ new downtown headquarters.

“We’re very positive,” Pottle said. “We have more job activity and bidding activity here than we’ve seen in many, many years.”

Not so for Kim Osborne, the co-owner of Top Notch Janitorial in Buffalo. Her business is feeling the pinch from intense competition from national chains. Efforts to put the state worker’s compensation system on more sound financial footing have added to her firm’s costs. And health care costs are rising under the Affordable Care Act.

“I think it’s getting worse,” said Osborne, whose fourth-generation family business has shrunk from 250 employees three years ago to 70 today. “Nothing is getting cheaper. Everything is going up.”

And that, in a nutshell, sums up how executives in the Buffalo Niagara region view the local economy, according to a new poll of high-ranking business officials by the Siena Research Institute in suburban Albany.

Many executives are optimistic, with their good feelings fueled by the spurt of new projects now getting underway, the state’s Buffalo Billion investment program and a national economy that has been slowly gaining strength.

But they’re still outnumbered by executives who remain wary of the signs of slow improvement and are still troubled by a business climate they believe is held down by the state’s burdensome taxes and regulations, as well as worries about the Affordable Care Act.

“They’re realistic,” said Donald Levy, the director of the Siena institute, which surveyed 195 local executives between late October and the end of last year.

“These CEOs are guarded. They’re hopeful and they intend to grow, but this is not a vibrant recovery,” he said. “They just don’t believe there will be a sudden uptick in business.”

The survey results paint a picture of local executives who are more than twice as optimistic as they were during the depths of the recession – and significantly more upbeat than they were last year. But their outlook still isn’t as bright as it was in 2010 and 2011, when they were expecting a strong rebound in the economy that never occurred.

“They’re just not prepared to be fooled again,” Levy said. “They’re just going to wait and see.”

Among the survey’s findings:

• Executives who consider themselves to be pessimistic still outnumber the optimists by about 9 percent in the Buffalo Niagara region. That’s a big improvement from a year ago, when the pessimist camp was almost 20 percent bigger than the optimist group.

• The executives have high hopes for the region’s medical industry, with more than half of them naming it as the sector that has the potential to have the biggest impact on the local economy.

• While more than half of the executives say there is an adequate supply of appropriately trained local workers, they have a “sobering” assessment of their skills, Levy said. Fewer than half of the executives give local workers good or excellent grades on their technical skills, work ethic or professionalism.

“They’re giving pretty harsh grades to job applicants” in a tight job market where only one of every three local executives surveyed expected their firms to hire additional workers this year, Levy said.

For a look at some of the survey’s findings about Western New York go to Page G2.