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LOUDONVILLE
Survey: Upstate business CEOs not optimistic
BY JAMES SCHLETT Gazette Reporter
Reach Gazette reporter James Schlett at 395-3040 or jschlett@dailygazette.net.

    As upstate business leaders wrestle with what could become the worst recession since World War II, they are increasingly taking defensive stances, making them more inclined to cut payrolls, according to a Siena Research Institute survey released Tuesday.
    The Loudonville pollster painted a gloomy picture for 2009’s economy, reporting that 83 percent of the 404 upstate chief executive officers surveyed said that their business conditions have gotten a little worse or considerably worse over the past six months. Looking forward, 72 percent of them expect business conditions to get a little or considerably worse through next year.
    By last autumn, when the CEOs were surveyed, their overall confi - dence had walked off a precipice, falling to 39 points from 77.7 a year earlier. That 38.7-point drop in the institute’s second index of New York business leader confidence suggests that the recession that pummelled the economy throughout last year is poised to inflict more damage in 2009. The scale ranges from 0 to 200. An index reading of 100 would signify an equilibrium between negative and positive sentiments.
    “At least at this point in time, a majority of CEOs believe it will get worse before it gets better,” said SRI Director Donald Levy.
    The survey — commissioned by the Lockport-based First Niagara Bank — shows that CEOs are changing their tactics for dealing with the recession that began in December 2007. In the previous survey, CEOs planned to focus on their core businesses, with 56 percent of them saying they would either expand in existing markets or grow in existing products.
    The number of CEOs reporting those core expansion plans for 2009 slipped slightly, though they remained in the majority. However, the number of business leaders eying internal restructuring initiatives over the year rose to 42 percent from 26 percent. Levy said that finding suggests that “CEOs are entertaining how to get their work done with fewer people.
    “Many of them are taking a defensive position that could affect the size of the work force,” Levy said.
    Out of the four metropolitan regions SRI surveyed, the Albany area’s overall confidence level of 39 trailed readings for Syracuse and Rochester, but it beat Buffalo.
    Fifty-two percent of Albany area CEOs said they plan to concentrate on internal restructuring in 2009, making the region the most open to the prospect of layoffs. At 39 percent, Rochester had upstate’s second-highest concentration of business leaders considering internal restructuring plans.
    “Clearly, there’s some worrisome news for the people who work for these companies,” Levy said.
    The SRI survey includes business leaders from upstate companies with annual revenues ranging from $5 million to $200 million. Some of those business have already launched internal restructuring initiatives that resulted in layoffs. In November, the Capital Region’s unemployment rate had climbed to 5.2 percent, a 16-year high for the month. Area companies that have announced mass layoffs since last autumn include the Saratoga Springs financial consulting firm Ayco Co., Latham hydrogen fuel cell maker Plug Power and Glenville train manufacturer Super Steel Products.
    CEOs’ growing emphasis on cost reduction comes as many of them brace for even steeper declines in revenues. Whereas 41 percent of business leaders expected revenues to grow moderately in 2008, that figure fell to 24 percent for 2009. During the same period, the percentage of CEOs expecting moderate decreases rose from 14 percent to 31 percent.
    Despite the gloomy confidence levels, Levy pointed out a “silver lining” in CEOs’ willingness to pursue capital investments. Although the percentage of business leaders reporting fixed-asset acquisition plans slipped from....................http://www.dailygazette.net/De.....amp;EntityId=Ar00400

Good thing the Gazette finally got around to figuring THAT one out.  Now we can all sleep.