Pittsburgh, PA (PRWEB) January 26, 2010 -- Working out of the deepest economic downturn since the Great Depression, private business leaders across Pennsylvania are showing signs of guarded confidence and recovery as they anticipate economic conditions facing them in 2010. This somewhat encouraging outlook is supported by results released today from the first annual Survey of Pennsylvania Business Leaders commissioned by First Niagara Bank and conducted by the Siena College Research Institute (SRI).
Close to one-half, 46%, of these business executives say they expect business conditions for the economy in Pennsylvania to improve in 2010, while 30% expect it to remain the same and another 25% expect it to become worse.
“Our Pennsylvania survey results are promising, showing that the needle is moving in the right direction as business leaders are up off their backs and regaining their footing,” said John R. Koelmel, president and CEO of First Niagara Financial Group Inc. (Nasdaq: FNFG), the parent company for First Niagara Bank.
First Niagara joined the Pennsylvania market last year with its purchase of 57 bank branches in Western Pennsylvania and is scheduled to close on the purchase of 83 branches in the first quarter of 2010 in Eastern Pennsylvania and the Lehigh Valley.
“As we work with CEOs and business leaders in the state, we believe companies are going to ‘do more with less,’ and remain very deliberate, cautious and disciplined when it comes to creating jobs or investing in their companies,” he said. “Over the long term, when the economy fully rebounds, we see Pennsylvania business leaders positioning themselves to succeed.”
Koelmel noted that survey results show more Pennsylvania business leaders expect revenues and profits for their companies to increase in 2010 than those who predict a decrease, and that they are focused on growing existing markets and demand for their firms’ products as the chief strategy for being profitable.
The survey also showed that two-fifths of the business executives (40%) say they plan in the coming year to invest in acquiring fixed assets – property, buildings, new tools, machines, vehicles and equipment. More business leaders (21%) say they will increase their workforce size in 2010 than those who say they will decrease it (13%). Almost two-thirds (65%) of these company executives say their workforce size will remain about the same in 2010.
This is the first year that First Niagara has gauged the opinions and perceptions of a rarely researched market segment – CEOs, CFOs and senior managers of private businesses recording between $5 million and $200 million in annual sales and located in Pennsylvania’s largest metropolitan statistical areas (MSAs): Allentown, Erie, Harrisburg, Lancaster, Philadelphia, Pittsburgh, Reading, Scranton and York.
A total of 755 business leaders responded to the survey conducted during the last two months of 2009. These leaders were asked to respond to the survey either by mail, on the SRI Web site, or through a personal interview. Of the CEOs responding to the survey, 25% were from the service industry, 17% from manufacturing, 16% from retail, 13% from wholesale and distribution, 13% from engineering and construction, 7% from food and beverage, and 5% from financial.
Key findings for the first annual Pennsylvania survey include:
The recording of an overall Confidence Index of Pennsylvania Business Leaders of 99.6, right at the breakeven point where one-half of the responses are positive about current and future business conditions and another one-half are pessimistic.
Specifically, the Confidence Index measures the current assessment and future expectations for the statewide economy and for leaders’ specific industries. It is based on a scale of 0 to 200 with zero being all negative responses and 200 being all positive responses. Thus, an index of 100 would have an equal number of negative and positive responses.
The Current Confidence Index component that assesses business conditions today as compared to six months earlier is 82.3 .The Future Confidence Index component that measures expectations for the coming year (2010) is more optimistic at 117.0.
All nine metro areas where business leaders were surveyed recorded a Future Confidence Index of over 100, led by a 137.1 in York, 131.9 in Scranton, 122.9 in Harrisburg, 120.4 in Allentown, 116.0 in Philadelphia and 112.6 in Pittsburgh. Recording the highest overall Confidence Index at 116.4 was also York, followed by Scranton, Harrisburg, Philadelphia, Lancaster, Allentown and Pittsburgh.
More than one-quarter (26%) of business leaders say current business conditions in Pennsylvania were a little better or considerably better in late 2009 as compared to six months earlier, while 35% say they are about the same and 23% say a little worse and 17% considerably worse.
As previously noted, almost one-half (46%) of business leaders said they expect business conditions in Pennsylvania to be a little better or considerably better in 2010, while 30% expect it to be about the same, 16% a little worse and 9% considerably worse.
41% of business leaders said they expect business in their own industry to be a little better (35%) or considerably better (6%) in 2010, with another 32% saying it will be about the same, 19% saying a little worse and 8% saying considerably worse.
65% of company leaders say they expect to maintain their current labor force size in 2010 while 20% say they predict at least a moderate increase and 1% say a substantial increase. Another 13% of respondents say they expect to reduce their workforce levels.
Despite a high level of future confidence, just 40% of Pennsylvania business leaders say they plan to invest in fixed asset acquisitions over the next year, 48% say they will not and another 12% are unsure. Of those who intend to invest in fixed assets, 50% plan to use internally generated funds while 32% intend to finance with the assistance of a financial institution and 10% plan to use private equity.
39% of Pennsylvania business leaders expect their company revenues to grow in 2010, 38% expect them to stay about the same, and 23% say they will decrease.
In regard to projected profitability, 32% of these business leaders expect their company profits to increase in 2010, 38% say they will stay about the same, and 30% say they will decrease.
Growing existing markets or demand for a firm’s products (40%) and cost reduction (36%) were named as the top two profit enhancement strategies identified by CEOs for 2010.
Overall, the number one challenge cited by Pennsylvania business leaders is governmental regulation (25%) followed by adverse economic conditions (23%), and taxation (10%). Health care was mentioned by a leading 72% of respondents as a concern but only 9% see it as the main concern.
“CEOs in Pennsylvania are dusting themselves off after two difficult if not brutal years,” said Dr. Donald P. Levy, Director, Siena College Research Institute. “But a growing number of them are signaling a slow cautious recovery. They are open for and doing business with a cautious but growing confidence.”
Statewide and regional results of the first annual Survey of Pennsylvania Business Leaders were announced today at a news conference at First Niagara’s Western Pennsylvania Market Center in downtown Pittsburgh by Todd Moules, Western Pennsylvania regional president of First Niagara, and Siena College officials.
Results from the first annual Survey of Pennsylvania Business Leaders are available at http://www.fnfg.com/AboutUs/InTheNews/CEOSurvey2010/.
ABOUT FIRST NIAGARA
First Niagara Financial Group, Inc., through its wholly owned subsidiary, First Niagara Bank, will have $19.3 billion in assets, 254 branches and $13.9 billion in deposits at the close of its acquisition of Harleysville National Corporation, which is expected in the first quarter of 2010, subject to regulatory approval. First Niagara Bank is a community-oriented bank providing financial services to individuals, families and businesses across Upstate New York and Pennsylvania. For more information, visit www.fnfg.com.
ABOUT SIENA RESEARCH INSTITUTE
Founded in 1980 at Siena College in New York's Capital District, the Siena Research Institute (SRI) conducts regional, statewide and national surveys on business, economic, political, voter, social, academic and historical issues. The surveys include both expert and public opinion polls. The results of SRI surveys have been published in major regional and national newspapers, including The Wall Street Journal and The New York Times, as well as in scholarly journals, books and an encyclopedia. For more information, visit www.siena.edu/sri.
ABOUT SIENA COLLEGE
Siena College is a learning community advancing the ideals of a liberal arts education, rooted in its identity as a Franciscan and Catholic institution. The beautiful, suburban campus is home to 3,000 undergraduates, located in Loudonville, N.Y., just a few miles outside of the state capital. Siena offers 29 majors, as well as 45 minor and certificate programs. Students engage in a highly personalized education where they are challenged in a way that prepares them for a lifetime of extraordinary achievement.