More leaders see a brighter future

The index of Upstate Business Leader Confidence rose by 18 points from 60.8 to 78.8 this year, pointing to regional CEOs being more upbeat about future conditions.

That’s according to the 18th annual Upstate New York Business Leader Survey that the Siena College Research Institute (SRI) released March 5. It’s sponsored by the Business Council of New York State, Inc, UHY Advisors, Inc., and Hudson Valley Economic Development Corporation.

However, the survey found that a majority (53 percent) of upstate New York CEOs surveyed say business conditions are worse (18 percent considerably, 35 percent a little) today than a year ago. In contrast, 17 percent say that New York’s economic conditions today as compared to a year prior are either a little (14 percent) or considerably (3 percent) better.

The outlook for the future is a bit brighter as 31 percent of upstate New York CEOs (up from only 18 percent last year) expect business conditions in New York to improve over the coming year.

By comparison, 59 percent of upstate New York CEOs surveyed a year ago said that conditions had been worsening, while at that time, 17 percent (unchanged) thought that economic conditions had been improving.

Again, this year, only 11 percent of CEOs say New York’s government is doing an excellent or good job creating a business climate in which companies can succeed and only 15 percent are confident in the ability of state government to improve the business climate.

“Despite little faith in New York’s government,” upstate CEOs are more optimistic about business conditions this year, and expect a better 2025, Don Levy, director of the SRI, said in the survey report.

“Over half of CEOs call on Albany to cut spending and reform both business and personal taxation and of all the challenges they face, the ‘winner’ is governmental regulation,” Levy said. “Concerns over adverse economic conditions, supplier costs and global political instability have eased a bit as Trump, engendering more confidence among CEOs than Biden did, assumed the Presidency. As the new administration takes the reins, New York CEOs are more optimistic — albeit guardedly — towards the future than they were a year ago.”

The survey — completed immediately after the November election of Donald Trump as president — found a 22-point increase from 13 percent to 35 percent of CEOs now expressing confidence in the federal government’s ability to improve business conditions for New York companies.

The Siena College Research Institute conducted interviews with 533 CEOs of upstate New York companies/nonprofit organizations from Nov. 6, 2024 through Jan. 26, 2025. CEOs were from the following industry sectors: service (23 percent); manufacturing (14 percent); retail (12 percent); engineering and construction (11 percent); nonprofit (9 percent); food and beverage (8 percent); wholesale/distribution (7 percent); financial (6 percent); health care (5 percent); tourism (3 percent); and technology (2 percent).

CEO sentiment

Each year, SRI computes an Index of Business Leader Confidence based on four questions in which CEOs assess the economy of New York, both current and future, as well as the current and future conditions in their industry.

An index score of 100 represents a breakeven point at which optimism and pessimism are balanced. Two years ago, the upstate index was at 68.8. Last year, the index fell to 60.8. Today the index is up to 78.8.

Today’s overall index is “up significantly” from last year and is the highest index SRI has recorded since 2018. The current component of the index, measuring CEO assessment of current/recent past economic conditions is 65, up 9.1 points from last year — driven not so much by improvement but rather by a lessening in the percentage of CEOs that say conditions have worsened.

The future index, measuring CEO outlook on state and industry conditions over the coming year stands at 92.5, an increase of nearly 27 points and nearing the point at which optimism is balanced with pessimism among all CEOs. This boost in future confidence has been most responsible for the overall 18-point rise, per SRI.

Looking to the next three to five years, CEOs expect several sectors to have a positive impact on the economic vitality of their geographic region. Topping the list, 55 percent cite technology followed by manufacturing (41 percent), tourism (40 percent), education (39 percent), and medical (39 percent).

Sixty percent (up from 56 percent a year ago) think that their company will be in business in New York 10 years from today. Still, only 43 percent, down from 45 percent last year, say that if they had it to do all over again, considering all factors, that they would locate their business in New York rather than someplace else.

Asked to sum up their appraisal of current business conditions in New York state, 30 percent of CEOs say they are staying the same; 4 percent getting better but a large majority, 66 percent, say that they are getting worse. All are “virtually unchanged” from a year ago.

Locally, the assessment is “somewhat better.” A majority describe business conditions in their local area as staying the same (46 percent) or getting better (7 percent) while 47 percent say that they are getting worse. Again, it was unchanged from a year prior.

“While there is a slight increase in optimism among CEOs since last year, the overarching theme continues to be one of concern for the fragility of our economy and the uncertain business climate,” Heather Mulligan, president & CEO of the Business Council of New York State, said in the SRI report. “The survey results confirm the sentiment that New York is increasingly unaffordable, and our elected leaders are doing little to address this or create a better business climate. We hope that the legislature and policy makers will be responsive to the employers and job creators in their districts and reverse the cycle of enacting policies that negatively impact our state’s workforce and economy.”

Projections

The SRI survey found 38 percent (up from 29 percent) of business leaders expect their revenues to grow over the course of 2025, and 22 percent (down from 33 percent) anticipate declining revenues.

It also found 28 percent (up from 21 percent) anticipate increasing profitability. Thirty percent (down from 43 percent last year) predict decreasing profitability. Consistent with increasing overall confidence, Upstate CEOs believe revenues and profits will increase at greater rates this year as compared to last.

More than one-third (38 percent) of CEOs say that they will focus on market and demand growth this year to enhance profitability, while 22 percent (down from 31 percent) will focus on price increases. It appears that easing price increases will contribute to softer inflationary pressures, per the SRI.

This year, 58 percent of CEOs (up from 50 percent) intend to invest in fixed assets for their company designed to meet growing demand, reduce costs, or enhance profitability. This is the highest rate of intended fixed-asset acquisitions that SRI researchers have seen since prior to the pandemic. At least 50 percent of CEOs plan to invest across all industry sectors. In both manufacturing and engineering/construction, 70 percent now plan to make investments in fixed assets, the report found.

Asked about the challenges that they face, at least 50 percent of all CEOs cited barriers that include adverse economic conditions (50 percent, down from 58 percent last year); governmental regulation (61 percent, down from 65 percent last year); health-care costs (55 percent, virtually unchanged); taxation (55 percent, unchanged from last year); and rising supplier costs (48 percent, down from 56 percent last year).

Workforce

The Siena College Research Institute survey found 29 percent (unchanged from last year) of CEOs plan to increase the size of their workforce this year.

It also found 76 percent of CEOs (down from 80 percent) say they’re not seeing an “ample supply of local workers that are appropriately trained” for their employment needs. Only 19 percent of respondents believe that a trained worker supply is available. The numbers are slightly improved from the last three years but “considerably worse” than four years ago when the numbers were 28 percent and 61 percent, respectively.

About two-thirds (66 percent) of CEOs (down from 75 percent a year ago) continue to say that they’re having difficulty recruiting to fill open positions. That measurement of having difficulty filling open positions remains highest in engineering/construction (86 percent) and manufacturing (75 percent).

The survey also found 25 percent (down from 33 percent last year and off from 38 percent two years ago) say they’re having difficulty retaining existing employees.

Still, many CEOs are taking a series of steps to both recruit and retain employees. SRI says it detects “slightly less pressure” on CEOs to accommodate the demands of workers to recruit and retain.

Asked to assess the quality of job applicants on a series of skills and attributes, CEOs again provide a “predominantly negative” assessment. The survey also found only 22 percent of upstate CEOs rate as excellent or good the overall efforts in their area to promote workforce development.

Nearly one-third of upstate New York business leaders indicate that their own company plays the biggest role in workforce development. Another 31 percent credit local community colleges while fewer than 10 percent say that major employers, state government, or business groups are taking the lead in workforce development.

Nearly two-thirds (64 percent) say that it is at least somewhat likely that their company would actively participate in a workforce-development partnership program involving local educational institutions, local or state government, and companies like their own.

Artificial intelligence

The SRI survey also found 72 percent of CEOs say they’re either very (15 percent) or somewhat (57 percent) familiar with artificial intelligence (AI).

The report also indicated that 37 percent say that their company currently utilizes AI. Utilization is greatest in the nonprofit (66 percent). financial (61 percent), and manufacturing (42 percent) sectors.

Of those that use AI, 76 percent say it has increased efficiency, 36 percent cite consumer-outreach benefits, and 15 percent credit AI with growth.