Lee County Business Climate Survey Report. Fourth Quarter, 2015

Transcription

1 Lee County Business Climate Survey Report Fourth Quarter, 2015 Prepared by: Regional Economic Research Institute Lutgert College of Business Florida Gulf Coast University December 11th, 2015

2 Introduction The Horizon Council FGCU Business Climate Survey serves to take the pulse of our local business community and the economy. The survey is completed quarterly adding to understanding of the economy and key business issues and concerns. It is designed to provide timely information and feedback on key issues and concerns to the business community, elected officials, and citizens. One of the key features of this survey is the calculation of an Executive Business Climate Index (EBCI). This index provides a summary number which will allow one to quickly gauge whether the business climate in Lee County is improving or declining. The results from the fourth quarter survey reflect a slight uptick from the third quarter result, with the index increasing from 70 to 71. Overall, the ECBI has remained between a narrow band between 74 and 69 over the last twoyear period. Earlier in 2015, USA Today and Wells Fargo conducted a national survey querying respondents impressions about the state of both the U.S. economy and that of their local community. It concluded that Americans were still wary about the economy six years following the end of the Great Recession, with Moody Analytics Chief Economist Mark Zandi concluding that people are still cautious and haven t really bought into the idea that this economy is performing well. The dark shadow of the recession continues to hang over the collective psyche. (The full survey report can be read at Building upon that effort, we asked Lee County business owners and executives the same questions to compare their impressions with those found nationally, and found that local respondents were generally much more optimistic about the economy than those of the nation at large. These results are reported on pages 13 and 14 of this report. This survey would not have been possible without the many busy business owners and executives who took the time to respond to our survey. I also thank Glen Salyer, Shane Farnsworth, and their colleagues at the Lee County Economic Development Office; Robert Beatty, Dean of Lutgert College of Business at FGCU; Russell Schropp, Chair of the Horizon Council s Business Issues Taskforce; Gary Griffin, Chair of the Horizon Council s Healthcare Taskforce; and Michael Quaintance of Keiser University. CareerSource Southwest Florida s James Wall and Peg Elmore provided valuable input and advice. Kendall Coughlin, an FGCU student research analyst, was instrumental in analyzing the survey information and co-authoring the report, while FGCU staff economist John M. Shannon assisted with the survey and report. Christopher Westley Dr. Christopher Westley Director, Regional Economic Research Institute Lutgert College of Business Florida Gulf Coast University FGCU Boulevard South Fort Myers, Florida Fourth Quarter, 2015 Page 2

3 Executive Summary The Executive Business Climate Survey provides a view of the local economy that is based on responses from senior executives from a range of industries across the county. An invitation to complete the internet survey was sent to 564 executives and business owners in Lee County. Ninety-two executives completed the survey from November 2, 2015, to November 16, Three reminders were sent during the survey period. This survey provides a key economic indicator for Lee County, the Executive Business Climate Index. This index value is computed each quarter and released to the public as a way to provide an established economic indicator on the state of the local economy. The index is computed using the two questions concerning the current and future economic conditions and a third question concerning the expected industry economic conditions. The index is an average of the responses, with substantially better equal to 100, moderately better equal to 75, same equal to 50, moderately worse equal to 25 and substantially worse equal to zero. The index value can range from 0 to 100. The key findings of the Executive Business Climate Survey for the fourth quarter of 2015 are: The Lee County Business Climate Index was 71 for the fourth quarter survey (December 2015), up from 70 for the third quarter survey (September 2015); 77 percent of executives stated that the current economic conditions have improved over last year, while 22 percent stated that they were the same; 80 percent of the executives expect the economy to improve over the next year; 69 percent of the executives stated that the current economic conditions for their industry have improved over last year, but 26 percent stated that economic conditions remained approximately the same, and 4 percent say they are moderately worse; 66 percent of executives expect economic conditions for their industry to improve over the next year; 66 percent of companies expect to increase investment next year while 3 percent expect to reduce investment levels; 57 percent of executives had increased employment over the last year, while 5 percent had reduced employment; 55 percent of executives expect to increase employment at their companies during the next year and 4 percent of executives expect to reduce employment; Fourth Quarter, 2015 Page 3

4 While 81 percent of executives believe the local economy provides a healthy business environment, 53 percent believe the national economy provides a healthy business environment; While 77 percent of executives indicated that Lee County has a growing job market, 67 percent believe the national economy had a growing job market; While 42 percent of respondents believe Lee County s education system prepares skilled workers, 36 percent believe this applies to the rest of the country; While 63 percent of executives believe that Lee County has a strong middle class, 49 percent believe the nation has a strong middle class; While 84 percent of executives agree that Lee County cost-of-living expenses are reasonable, 71 percent believe this applies to the rest of the country; While 45 percent of respondents believe Lee County s economy provides the ability to have a financially secure retirement, the same percentage believed the same applies for the rest of the country; While 31 percent of executives believe that few people live in poverty in Lee County, 21 percent believe few people live in poverty in the rest of the country; Finally, while 78 percent believe that economic conditions are good in Lee County, 60 percent believe this applies in the rest of the country. Fourth Quarter, 2015 Page 4

5 Table of Contents Introduction... 2 Executive Summary... 3 I. Current Economic Conditions... 6 II. Future Economic Conditions... 7 III. Current Industry Economic Conditions... 8 IV. Future Industry Economic Conditions... 9 V. Hiring Over Last Year VI. Hiring Over Next Year VII. Investment Levels Expected Next Year VIII. USA Today Study vs. Lee County Views on the Economy IX. Other Comments, Suggestions, or Recommendations? X. Company Characteristics Appendix. Other Comments, Suggestions, and Responses Fourth Quarter, 2015 Page 5

6 I. Current Economic Conditions How are current Lee County economic conditions compared to one year ago? As shown in Figure 1 and Table 1, 11 percent of the executives indicated there were substantial improvements in the overall economic conditions, 66 percent reported they experienced moderately better economic conditions, 22 percent indicated conditions were unchanged from a year ago, 1 percent of executives indicated economic conditions were moderately worse, and none indicated the economic conditions were substantially worse. Figure 1: Current Economic Conditions Table 1: Current Economic Conditions Current Economic Conditions Compared to One Year Ago Number of Responses Percent Substantially better 10 11% Moderately better 61 66% Same 20 22% Moderately worse 1 1% Substantially worse 0 0% Total % Fourth Quarter, 2015 Page 6

7 II. Future Economic Conditions What are your expectations for the Lee County economy one year ahead? As shown in Figure 2 and Table 2, 10 percent of surveyed executives indicated that they expect substantial improvement, 70 percent expect moderately better economic conditions, 21 percent expect economic conditions to remain unchanged, no executives indicated that they expect economic conditions to be moderately worse, and no executives indicated that economic conditions are expected to be substantially worse. Figure 2: Future Economic Conditions Table 2: Future Economic Conditions Next Year Economic Conditions Number of Responses Percent Substantially better 9 10% Moderately better 64 70% Same 19 21% Moderately worse 0 0% Substantially worse 0 0% Total % Fourth Quarter, 2015 Page 7

8 III. Current Industry Economic Conditions What are the current conditions in your industry in Lee County compared to one year ago? As shown in Figure 3 and Table 3, 18 percent of executives indicated that current conditions were substantially better for their industry, 51 percent indicated conditions were moderately better, 26 percent believed conditions were the same as last year, four percent believed that conditions were moderately worse, and no executives believed that current conditions were substantially worse than one year ago. Figure 3: Current Industry Economic Conditions Table 3: Current Industry Economic Conditions Current Industry Economic Conditions Number of Responses Percent Substantially better 17 18% Moderately better 47 51% Same 24 26% Moderately worse 4 4% Substantially worse 0 0% Total % Fourth Quarter, 2015 Page 8

9 IV. Future Industry Economic Conditions What are your expectations for your own industry in Lee County one year ahead? As shown in Figure 4 and Table 4, 11 percent of executives indicated that conditions are expected to be substantially better next year, 55 percent expected that conditions would be moderately better, 28 percent expected conditions would be approximately the same as this year, 5 percent expected future economic conditions would be moderately worse, and no executives thought conditions would be substantially worse. Figure 4: Future Industry Economic Conditions Table 4: Future Industry Economic Conditions Next Year Industry Economic Conditions Number of Responses Percent Substantially better 10 11% Moderately better 51 55% Same 26 28% Moderately worse 5 5% Substantially worse 0 0% Total % Fourth Quarter, 2015 Page 9

10 V. Hiring Over Last Year What has been your hiring trend over the last year? As shown in Figure 5 and Table 5, 10 percent of executives indicated that their companies substantially increased employment, 47 percent moderately increased employment, 38 percent had little or no change in employment, 4 percent had moderately reduced employment, and 1 percent of executives indicated substantially reducing employment. Figure 5: Employment Changes Over the Last Year Table 5: Employment Changes Over Last Year Employment Changes Over the Last Year Number of Responses Percent Substantially increased employment 9 10% Moderately increased employment 43 47% Little or no change in employment 35 38% Moderately reduced employment 4 4% Substantially reduced employment 1 1% Total % Fourth Quarter, 2015 Page 10

11 VI. Hiring Over Next Year What hiring trends do you see for your business over the next year? As shown in Figure 6 and Table 6, 8 percent of executives expect to substantially increase employment over the next year, 47 percent expect to moderately increase employment, 42 percent expect little or no change in employment, 3 percent expects to moderately reduce employment, and 1 percent of executives expect to substantially reduce employment. Figure 6: Employment Changes Over Next Year Table 6: Employment Changes Over Next Year Hiring Over Next Year Number of Responses Percent Substantially increase employment 7 8% Moderately increase employment 43 47% Same or flat employment 38 41% Moderately reduce employment 3 3% Substantially reduced employment 1 1% Total % Fourth Quarter, 2015 Page 11

12 VII. Investment Levels Expected Next Year Do you plan to increase investment in your business during the next year? As shown in Figure 7 and Table 7, 16 percent of executives indicated that their companies expect to substantially increase investment next year, 50 percent are planning to moderately increase investment, 31 percent expect to keep investment levels the same, 2 percent of executives expect to moderately reduce investment, and 1 percent expects to substantially reduce investment. Figure 7: Expected Investment Changes Over Next Year Table 7: Expected Investment Changes Over Next Year Investment Expenditures During Next Year Number of Responses Percent Substantially increase investment 15 16% Moderately increase investment 46 50% Keep investment the same or flat 28 30% Moderately reduce investment 2 2% Substantially reduce investment 1 1% Total % Fourth Quarter, 2015 Page 12

13 VIII. USA Today Study vs. Lee County Views on the Economy How do you rate economic conditions in your community? In the U.S.? In August 2015, USA Today and Wells Fargo conducted a national survey of Americans impressions about the state of both the U.S. economy and that of their local community. We asked Lee County business owners and executives some of the same questions, with the results shown in Figure 8, Table 8, Figure 9, and Table 9. As shown below, respondents in Lee County were more optimistic about the local and national economy than were respondents to the USA Today/Wells Fargo survey. Figure 8: Views on Their Community Table 8: Views on Their Community Lee County USA Today Healthy business climate 81% 31% Growing job market 77% 32% Education system preparing skilled workers 42% 32% Strong middle class 63% 30% Reasonable cost-of-living expenses 84% 36% Ability to have a financially secure retirement 45% 21% Few people living in poverty 31% 25% View economic conditions as good 78% 50% Fourth Quarter, 2015 Page 13

14 Figure 9: Views on the Nation Table 9: Views on the Nation Lee County USA Today Healthy business climate 53% 20% Growing job market 67% 29% Education system preparing skilled workers 36% 22% Strong middle class 49% 17% Reasonable cost-of-living expenses 71% 22% Ability to have a financially secure retirement 45% 22% Few people living in poverty 21% 8% View economic conditions as good 60% 27% Fourth Quarter, 2015 Page 14

15 IX. Other Comments, Suggestions, or Recommendations? Other comments, suggestions, or recommendations you would like to make regarding the regional economy or your business? The comments indicated that executives were concerned with the seasonal shifts that workers experience during commutes and while looking for housing, as well as some general comments of the workforce. There are concerns and comments about: Increased seasonal & off-season traffic Quality schooling Public Infrastructure Proper training Slow economic recovery Upfront cost of housing Wage rates *Executive responses to this question are found in the Appendix. Fourth Quarter, 2015 Page 15

16 X. Company Characteristics Each executive provided information about his or her firm, including: Business Type; Number of Employees; Company Location; and Geographic Client Base. The following figures provide an overview of general characteristics of the responding companies. Figure 10: Business Type Fourth Quarter, 2015 Page 16

17 Figure 11: Employee Size of Firms Responding to the Survey Figure 12: Geographic Location of Survey Respondents Fourth Quarter, 2015 Page 17

18 Figure 13: Geographic Client Base Figure 14: Business Climate Index Fourth Quarter, 2015 Page 18

19 Appendix. Other Comments, Suggestions, and Responses The following list includes specific responses from the executives for question- Please indicate any other comments, suggestions, or recommendations you would like to make regarding the regional economy or your business: 1. Finding qualified applicants continues to be a problem. 2. The biggest risk to Southwest Florida's recovering economy is the high and rapidly growing rate of violent crime. The business community has the most to lose and the most to gain. A broad based community task force should be deployed to address this issue. The following four areas should be addressed: 1. Police: best in class trust based results funded community policing models. 2. Mental Health: social programs focused on prevention, early intervention and effective treatment. 3. Education: the quality of and accessibility to results driven education raises incomes and lowers crime rates. 4. Healthcare: accessibility is becoming a bigger issue in the decision matrix for relocating companies. Each focus group should be responsible to develop a strategy, provide success metrics and provide an economic model. 3. There is a lack of subcontractor laborers that does not meet the construction industry needs. Lee County School District board needs a larger sales tax to help with the schools. 4. I am surprised there was not a neutral position on answering the question (i.e. neither agree nor disagree). 5. The US approach to private business is very challenging. Marginal tax rates for medium size firms are 43%. Mandates from the Federal Government are released regularly at a constant flow of change, along with increased cost and complexity with the presumption of an unfettered ability to pay. 6. The growth that Lee County is experiencing will soon be stifled due to infrastructure constraints. The county does not have adequate funds to improve roadways and they do not have a plan to get those funds in the future. These infrastructure constraints will cause businesses and individuals to look to other places outside of Lee County to reside and build their businesses. Lee County's approach to infrastructure has been to wait for it to fail and then try to do something instead of having forethought and getting the infrastructure in place throughout the areas where growth is destined to occur in the future. This has been, and continues to be, their downfall. 7. Lee County is not business friendly to a light industrial presence. Lee County - unfortunately - provides a climate based on retirement, health care, and some education and tourist services, with a moderate support system. They "give" monies to big business to relocate and from that transaction provide mid to low paying jobs to locals - in almost all cases. Small business needs to thrive in Fourth Quarter, 2015 Page 19

20 SWFL. Lee County needs to be more "mom and pop" business friendly when it comes to light industry: the money that supports local retail/entertainment outlets. 8. The "good ol boy" form of government is alive and well in Lee County. They see themselves as invincible along with their commission/policy decisions. Providing business incentives that result in a mediocre employment climate is just one example. The county needs to be more business friendly to those services that support the population. For example: Do you know how difficult it is to start a mom and pop auto shop? Something that would bring in substantial paying jobs and a need to the community? There is no wonder most give up and either go to a national retailer or another county. We need a strong light industrial base in this community - which we truly don't have - to balance the construction/tourist services strong system. If we don t, we will head for yet another financial crisis within the next months. 9. Predictions for growth, hiring and expected outcomes are moderate. This is only because hiring people to grow sales, and actual outcomes, are not where they should be. We can outpace expectations if we are able to hire more people and create a stronger infrastructure to do so. Limitations are solely based on getting the right people. 10. We are going through an expansion in our operations and our facilities in Ft. Myers. The whole permitting process should have been better. There are projects that require more scrutiny than others. The process should be shorter for a very direct no-nonsense project. 11. Engineering type employees are difficult to find and typically not properly trained when you find them. The workforce will be an issue until more people migrate to the area. 12. Taxes remain high affecting both the employee and the prospect. Furthermore, the federal government is not business minded and the economy remains brittle. Fourth Quarter, 2015 Page 20