As the Rochester region continues to emerge from the recession, local businesses are optimistic about the future, expecting increases in both sales and employment over the next 12 months, according to a survey of Rochester Business Alliance members.

The survey asked Rochester Business Alliance member companies to provide information on a variety of issues, including general business 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 the most frequent responses related to the cost of health care and the high cost of doing business in New York state, including taxes and compliance with excessive regulations.

"There is a lot to feel good about in these results," said Sandy Parker, president and CEO of the Rochester Business Alliance. "Businesses are not just seeing better times ahead, they've actually begun to experience them."

"Still, there is significant 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. We at the Rochester Business Alliance promise to continue our work to bring change that will make it easier for businesses to be successful and create jobs."

On general business conditions:
The results reflect just how bad things were. Asked to describe current business conditions in their industry, 48 percent said "good or very good," up significantly from 14 percent in May 2009. Only 13 percent said "bad" or "very bad," down from 39 percent in May 2009. As for current business conditions in Greater Rochester, 24 percent said good or very good, up from 7 percent in May 2009.

There is significant optimism about the future. Asked how they expect business conditions in their industry to be a year from now, 63 percent said good or very good, up from 44 percent in May 2009, and 39 percent in November 2008. Meanwhile, 7 percent said bad or very bad, more than half of the 16 percent in May 2009 and 18 percent in November 2008.

On employment levels:
Among the surveyed group, it appears hiring may be picking up. Asked how current employment levels compared with those of a year ago:

• 39 percent said employment levels had increased, compared with just 15 percent in May 2009;
• 45 percent said employment remained unchanged, compared with 22 percent in May 2009;
• Only 16 percent said employment levels had decreased, a major change from the 63 percent reported in May 2009.

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

• 54 percent said it would increase, compared with 37 percent in May 2009;
• 38 percent said it would remain unchanged, compared with 49 percent in 2009;
• 7 percent said it would decrease, compared with 14 percent in May 2009 and 24 percent in November 2008.

Among those who said they would hire, 87 percent said they plan to add full-time staff.

Asked about the unemployment rate in Monroe County, 6 percent expect it will be higher a year from now, 65 percent said it will stay about the same and 29 percent said it will be lower.

On the balance sheet:
Asked about sales:

• 59 percent said they were better than a year ago, 22 unchanged and 19 percent worse. That compares with 71 percent who said in 2009 that they were worse than in the previous year.
• 72 percent said they expect them to be better a year from now, 22 percent unchanged and 6 percent worse. That compares with only 59 percent in the 2009 survey who were expecting improved sales.

Asked about profits:

• 57 percent said profits are better than a year ago, 22 percent unchanged, and 21 percent worse. That question was not asked in the 2009 survey.
• 62 percent said they expect profits to rise a year from now, 33 percent expected them to be unchanged and 5 percent expected them to be worse.

On the cost of doing business:

• 57 percent said it is worse than a year ago, compared with 32 percent who said it is unchanged and 11 percent that said it is improved.
• 49 percent said the cost of doing business will be worse a year from now, compared with 35 percent not expecting a change and 16 percent expecting improvement.