Despite a challenging 2009, local businesses are optimistic about the future, expecting both sales and employment to stabilize and even improve over the next 12 months, according to a survey of Rochester Business Alliance members.

The survey, conducted in May 2009, asked Rochester Business Alliance member companies to provide information on a variety of issues, including general outlook, past, current and future employment and business conditions in their industry and in the region.

It also asked them to write in the most significant challenges to their future success, and by far the most frequent response was the anti-business climate in New York state, including high taxes, high state spending and excessive regulations that raise the cost of doing business.

"These results show the resiliency and optimism of our business community," said Sandy Parker, president and CEO of the Rochester Business Alliance. "But they also highlight intense frustration about the way our elected officials conduct the people's business in Albany. Businesses are angry over the lack of spending restraint that has resulted in New Yorkers paying some of the highest state and local property taxes in the nation. And they're fed up with the laws that make it more expensive and more difficult for businesses to be successful, and therefore stifle job creation."

On general business conditions:
The results reflect a difficult 2009, with only 14 percent describing current business conditions in their industry as good or very good, down from 32 percent in November 2008 and 54 percent in December 2007. Asked to quantify current business conditions in Greater Rochester, only 7 percent categorized them as good, down from 22 percent in November 2008, and 15 percent in December 2007.

Yet there is decided optimism for the future. Asked how they expect industry business conditions to be a year from now, 44 percent said good or very good, up from 39 percent in November, but down from 60 percent in December 2007. Meanwhile, 16 percent said bad or very bad, down slightly from 18 percent in November, but up from 9 percent in December 2007.

The optimistic trend was more pronounced when the survey group was asked about future business conditions in Greater Rochester, with 38 percent expecting conditions to be good or very good a year from now, up from 31 percent in November and 25 percent in December 2007. The percentage of those who were expecting bad to very bad conditions were only 10 percent, down from 20 percent in November and 19 percent in December 2007.

On employment levels:
Among the surveyed group, the worst may be in the past. Eighty-five percent of those surveyed said their companies had no layoffs planned in the coming months.

Asked how current employment levels compared with those of a year ago:

• 15 percent said employment levels had increased, while 22 percent remained unchanged
• 63 percent said employment levels had decreased

The number of companies reporting increased employment was down significantly from 40 percent in November 2008 and 54 percent in December 2007.

Asked how they anticipate their staffing to be a year from now:

• 37 percent said it would increase
• 49 percent said it would remain unchanged
• 14 percent said it would decrease, down from 24 percent expecting a decrease when surveyed in November

The survey also made it clear that businesses had taken a variety of actions to avoid laying off workers, including freezing expenses, limiting overtime, curtailing business travel, reorganizing staff and freezing executive pay and reducing bonuses.

Wage freezes or lower pay increases are some other cost savings actions cited by many. Although this survey did not inquire as to the extent of those actions, other Rochester Business Alliance surveys give a strong indication. In the 2008 Pay Trends Survey, respondents said they expected to be offering pay increases this year of about 3.5 percent. Yet when surveyed again in January as part of the RBA Annual Wage and Salary Surveys, respondents projected average pay increases of 3.2 percent for 2009.