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By: Adina Genn March 1, 2022
As the impact of COVID-19 continues to impact the business community, more than half of Long Island’s CEOs expect profits to grow this year and plan to invest in fixed assets. And despite the cost of doing business on Long Island, nearly all expect that in five years they expect to stay in the region.
That’s according to the PKF O’Connor Davies 2022 Long Island Economic Survey, whose results were released Monday. The survey was conducted in partnership with Siena College Research Institute.
“My takeaway is that Long Island is going to be all right,” Jeffrey Davoli, co-partner in charge of PKF O’Connor Davies’s Hauppauge office, wrote in an email about the survey’s findings.
“We have a group of dedicated government and business leaders who will ensure it,” he added. “There’s hard work ahead as we all seek to put the pandemic behind us and face some of the new headwinds before us. But we’re up to the challenge. We always are.”
Survey respondents were from across Long Island and represented a host of industries, with 49% from the service sector and 17% from the financial sector. Among the total of 10 sectors polled, 7% represented technology industries, and 4 % were from healthcare. And while 35% were from companies with one to 10 employees, 18% employed 250 or more. Additional details were not immediately available.
The survey found that more than half of the CEOs said they would again choose to locate their business on Long Island. And 97% expect to be in business on Long Island five years from now, with 74 % of Long Island business leaders think that the general business climate is improving.
Findings also revealed that 59% of the business leaders polled believe the general business climate is better than last year, while 17% think it is staying the same, and 23% believe it is worse.
And confidence in the Long Island economy reached 6.8, up from 6.5 a year ago. It had reached 7.2 in 2018.
More than eight out of 10 expected to see revenues and profits grow in 2022, with 52% saying they planned to increase market demand and growth. Others would implement cost reductions or price increases, as well as new technology and other methods of profitability strategies.
The survey found that 55% of CEOs aim to invest in fixed assets for their business. Yet only 16% say they plan to invest in fixed assets to address climate change, while 29% are unsure.
The top anticipated focuses for 2022 include expanding existing markets, growing in existing markets and entering new markets. Twenty-six percent say navigating COVID-19 will be a major area of concentration. And COVID’s continuing impact is cited most often as a challenge, ahead of adverse economic conditions, rising supplier costs and both health care costs and taxation.
As for hiring, 41% of CEOs plan to increase their workforce and only 3% plan to decrease. Still, 62% say there are not enough local workers trained for their needs. And 88 % expressed difficulty either recruiting to fill open positions or retaining existing employees. Meanwhile 34 % say they are paying new hires more, and still struggle to fill jobs. And 28% said that raising starting pay has forced them to increase pay for more senior employees.
Regarding state government, 38% say officials are doing a poor job in fostering a successful business climate. They would like lawmakers to focus on personal income tax reform, business development incentives, infrastructure development and business income tax reform.
Only 27% say the federal government is doing an excellent (6 %) or good (21 %) job. And just 30 % are very confident (4%) or somewhat confident (26%) that the federal government can create a climate where businesses can succeed.
As to the government’s expected handling of COVID going forward, 34% said they were somewhat confident, and 11% very confident in the federal government’s response; and 40% said they were somewhat confident and 13% said they were very confident in the state’s response.
Meanwhile, four out of 10 CEOs think the national economy will be better in 2022, while about the same number think it will be worse. Yet two-thirds thought the U.S. economy will see a recession by the end of the year.
Yet, 55% of CEOs remain relatively optimistic that the stock market will continue to go up in 2022.
Forty-nine percent of business leaders expect residential real estate prices to increase over the next year, with 30% expecting prices to decrease.
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