Capital Region CEOS still cautious
Recovery a battle amid lost sales, furloughs and COVID isolation
Colonie
Economists and analysts may be expecting a robust rebound from the pandemic, but the folks in the corner office aren’t as upbeat.
The Siena College Research Institute’s annual survey of upstate CEOS is out, and it paints a picture of companies struggling to recover after more than a year of furloughs, lost sales and social isolation and distancing.
Nearly four in 10 — 39 percent — of Capital Region CEOS expect the economy will worsen during the rest of 2021, although 44 percent expect improvement. That compares to 43 percent statewide who expect the economy to worsen, while just 40 percent expect improvement.
The Capital Region business leaders are slightly more pessimistic about their own industry. Asked whether conditions would improve during the rest of the year, 39 percent believed they would while 41 percent thought conditions in their industry would worsen.
The Siena survey includes responses from 1,036 CEOS across upstate. The survey was conducted between Jan. 12 and March 12, during the depths of the pandemic.
Nearly three in four Capital Region CEOS — 73 percent — say a recession before the end of the year is somewhat or very likely, or certain. Statewide, 74
percent of respondents felt that way.
Asked where their challenges were for the coming year, dealing with COVID -19 came in third, both among Capital Region CEOS and those statewide. Expanding in existing markets and growing in those markets ranked first and second, respectively.
Profits were squeezed, said a majority of respondents statewide. The cost of doing business, especially in food/beverage, wholesale/distribution, retail and manufacturing rose thanks to the pandemic, while sales and profitability fell.
A majority of respondents both in the Capital Region — 61 percent — and statewide — 58 percent — believed the state’s actions to combat COVID -19 were “about right,” while 36 percent of Capital Region respondents and 40 percent of respondents statewide thought the state’s actions were “too strict.”
The federal government received poor grades from the majority of respondents for its handling of the pandemic, with 29 percent saying they were “not too satisfied” and 39 percent saying they “weren’t at all satisfied.” The survey was taken during a transitional period between administrations in Washington.
Since then, the Biden administration’s efforts have generally received high marks, with 73 percent of respondents approving his handling of the pandemic in a March 31 AP-NORC poll.
On Thursday, JP Morgan Chase Chairman and CEO Jamie Dimon, in a letter to shareholders, predicted that the economy would thrive as it emerges from the pandemic.
“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon wrote. “This boom could easily run into 2023 because all the spending could extend well into 2023.”
In December, Hugh Johnson, internationally known economist and founder of the Albany investment firm JNBHUGH Johnson Advisors, suggested that, if the government did the right thing, we could be entering boom times similar to the Roaring ’20s. Johnson made the remarks during his annual economic forecast to the Capital Region Chamber of Commerce.
The right thing, Johnson suggested, would be government stimulus, something that the Biden administration has since rolled out.
Capital Region CEOS gave poor marks to state government and its ability to create healthy business climate. Just 2 percent said the state was doing an “excellent” job on creating a healthy business climate, while 30 percent said it was doing a “fair” job and 62 percent said it was doing a “poor” job.
Capital Region respondents suggested state government should focus its efforts on spending cuts, business income tax reform, and addressing the budget deficit (49 percent in each category); personal income tax reform (48 percent); and business development incentives and infrastructure development (46 percent each).
When companies were asked that, if they had to do it all over again, would they locate in New York, 58 percent of Capital Region CEOS responded that they would not. Statewide the figure was 52 percent.
Of the Capital Region respondents, 76 percent were male and 24 percent female, 96 percent were white, 2 percent were other. Asian and Hispanic respondents each made up 1 percent. There were no Black respondents.
““I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” — Jamie Dimon, JP Morgan Chase Chairman and CEO