ECONOMIC SURVEY & OPINION POLL 2015

LONG ISLAND ECONOMIC SURVEY & OPINION POLL 2015 Celebrating 65 Years libn.com

Thank you for your participation and interest in our survey over the last 21 years. We fully recognize that if it were not for the Long Island business community the survey would never have come this far. We are so grateful to our respondents and to the business men and women who turn out each year to attend our results breakfast. You have been the reason we want to make this survey bigger and better year after year. As you may be aware, our survey was developed to provide economic data to executives who work or operate their business in Nassau and/or Suffolk Counties. The information contained in this results booklet is an analysis of the data collected from these executives and represents the trends associated with conducting business here in the Long Island region. Our survey includes a variety of topics as well as some open-ended questions which allow for comments. The survey which was sent out in mid-october is now conducted totally electronically. The survey remained open until mid-november, after which time the results were then tabulated and analyzed. We appreciate your interest in our questionnaire and survey results, but most importantly to your ongoing commitment to the Long Island business community. We hope you will find this data beneficial as it reflects the experiences of our local business owners, who are the foundation upon which our Long Island economy exists. Executive Summary: The National economic confidence rating increased from 5.5 to 5.8. The Long Island economic confidence rating increased slightly from 5.6 to 5.7. 56% of respondents think their current business situation is the same or better now than prior to 2008. 57% realized an increase in revenue in 2014. 63% of respondents project an increase in revenue in 2015. 47% project their net income for 2014 will be higher than 2013. 37% experienced an increase in headcount during 2014. 92% of respondents project headcount will either remain steady or increase in 2015. 47% of respondents believe that the Health Care industry has the greatest growth potential on LI. 33% of respondents believe the Denver Broncos will win Super Bowl XLIX. We are continually grateful that our survey is used as a reference for countless business men and women throughout Long Island. We thank the Long Island Business News for being our valued partner, as well as all our prestigious sponsors who have supported this endeavor. Once again, we thank you for your participation and we welcome your comments or feedback as we move to create a more valuable survey for you each year. Best wishes for growth and success in 2015. Celebrating 65 Years libn.com Sponsored by

DEMOGRAPHICS WHERE IS YOUR PRINCIPAL PLACE OF BUSINESS? The results of the 2015 Long Island Economic Survey and Opinion Poll were compiled by Albrecht, Viggiano, Zureck & Company, P.C. (AVZ) in partnership with the Long Island Business News (LIBN). An electronic survey was sent out to Long Island business men and women in mid- October 2014. 9% 12% 20% More than half (59%) of the respondents maintain their business operations in Suffolk County, less than one quarter (20%) are in Nassau County, with 12% having facilities in both locations and 9% elsewhere. An overwhelming majority (89%) has been in business for more than 10 years and 57% have operated for over 30 years. n Nassau County n Suffolk County n Both n Elsewhere 59% The majority of respondents (78%) reported total employee headcount of less than 250, with over half (54%) employing less than 50 people. HOW MANY EMPLOYEES DO YOU HAVE? HOW MANY YEARS HAS YOUR COMPANY BEEN IN BUSINESS? 3% 8% 5% 17% 12% 47% 57% 15% 17% 6% 6% 7% n Less than 25 n 25-49 n 50-74 n 75-99 n 100-249 n 0 to 5 n 6 to 10 n 11 to 20 n 250-500 n Greater than 500 n 21 to 30 n Over 30 I 1 I

Our respondents represent a very diverse cross section of industries. Over one-third of the respondents (34%) categorized their industry as Other. 3% 5% Privately held businesses represent 80% of the respondents. TYPE OF BUSINESS n Health Care n Manufacturing n Distribution n Technology n Construction n Retail n Professional Services n Other Services n Tourism n Other 9% 34% 1 3% 5% 2% 28% ECONOMIC CONFIDENCE RATINGS We asked On a scale of 1-10 with 10 being the most confident, rate your confidence in the National economy. This is the tenth consecutive year we measured the National CONFIDENCE IN THE NATIONAL ECONOMY economic confidence 6.0 6.5 6.2 rating. Our results show 4.5 5.1 5.0 confidence on a National 4.5 4.7 5.5 5.8 level has increased slightly over last year to a 5.8 rating, which is the highest it has been since the recession began in 2008. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2013 2014 Is your current overall business situation better now than it was prior to the 2008 financial crisis? It is interesting to note that 56% of respondents find that business is either better than or the same as it was prior to the 2008 financial crisis. However, there are still a large number of businesses struggling with 44% responding that their current business situation is worse than prior to the 2008 financial crisis. I 2 I 14% 42% 44% n Yes n No n Same 12% 44% 44%

We asked On a scale of 1-10 with 10 being the most confident, rate your confidence in the Long Island economy. Confidence in the Long Island economy is marginally less optimistic than the national rating with a slight increase to 5.7 from 5.6 last year. While still not at pre-recession levels, the 2014 Long Island confidence rating is the best we have seen since the 2008 recession. CONFIDENCE IN THE LONG ISLAND ECONOMY 5.0 6.0 6.6 6.8 7.2 7.2 6.6 6.3 6.7 6.7 6.0 6.1 6.1 4.9 5.2 5.0 5.1 4.9 5.6 5.7 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 I believe the LI economy to be holding its own, however that will not be sustainable with the ever increasing amount of taxes, fees, and hidden taxes we are paying. We need better policy coordination between the two counties. I 3 I

REVENUE 2010 2011 2012 2013 2014 16% 18% 19% 3 37% 27% 4% 2 22% 1 5% 6% 2% 36% 3 10% 18% 25% 18% 10% 2% 3% 2 22% 2 2 5% 5% What is the actual revenue growth experienced by your company during 2014? This year 36% of respondents in 2014 versus 38% in 2013 realized an increase in revenue of more than 5%. A greater number of respondents (22% this year versus 18% in 2013) reported actual 2014 revenue to be less than the prior year. 4% 2% 3% 3% n No Change n Less Than Prior Year n 1-5% n 6-10% n 11-15% n 16-20% n 21-25% n Greater Than 25% 2010 2011 2012 2013 2014 2015 27% 22% 32% 28% 38% 9% 6% 26% 25% 12% 4% 22% 24% 24% 13% 35% 17% 5% 8% 33% 29% 6% 5% 18% 38% 9% { 12% 37% 12% 5% 4% { { { 3% 3% 3% 2% 3% 3% { 3% 2% How does your revenue projection for 2015 compare to the actual revenue experienced by your company during 2014? With regard to 2014, 63% are forecasting some increase in revenue versus 60% last year. In addition, 13% anticipate less revenue in 2015 than 2014 versus 12% last year. Down from last year, 24% of respondents project revenue to be stable for the next year as compared with 28% in the prior year. I 4 I

PRICES AND PROFITS 7 60% 64% 58% 45% 30% 33% 13% 10% 2% 14% 13% 1 2% 14% 16% 5% 8% 15% 13% 2010 2011 2012 2013 2014 n Decrease n 0-4% n 5-9% n 10-14% n Greater than 15% During the past 12 months, what was the average price increase (or decrease) of your products or services? In an encouraging shift over last year only 15% of respondents decreased prices versus more than twice that number (33%) in 2013. Greater price increases (5% to over 15%) were realized by 14% of respondents in 2014 versus only 9% in the prior year. 46% 45% 47% 27% 27% 28% 27% 30% 23% How does your projected net income for 2014 compare to your actual net income for 2013? Slightly increased from last year, 47% of the respondents (versus 45% in 2013) projected 2014 net income to be higher. A greater number of respondents (30% this year vs. 28% last year) projected their net income to be lower in 2014. 2012 2013 2014 n Higher n Lower n No Change I 5 I

EMPLOYMENT OUTLOOK Is your current headcount higher or lower than it was prior to the 2008 financial crisis? As we continue to emerge from the 2008 financial crisis, increases to headcount were reported by 40% of respondents, as compared to 3 for 2013. Lower headcount was reported by 37% of respondents and 23% had no change in the size of their workforce. 2013 2014 3 23% 3 40% 38% 37% n Higher n Lower n No Change What changes to headcount did you make in 2014? While 37% of respondents indicated an increase in headcount for 2014, a larger percentage (24% vs. 2 in 2013) decreased headcount. More than one-third (39%) cited no change. n Increased n Decreased n No Change 45% 45% 46% 25% 30% 27% 28% 28% 36% { 33% 2 37% 24% 39% 2010 2011 2012 2013 2014 I 6 I

Have you seen a substantial change in your employee turnover in 2014? 16% As we continue to recover from the 2008 recession, there appears to be a great deal of stability with employees staying put. An overwhelming majority of respondents (84%) did not experience a substantial turnover in their workforce in 2014. 84% n Yes n No What are your plans for headcount in 2015? Looking forward to 2015, the majority of firms (58%) are not planning on hiring additional employees. Over one-third of respondents (34%) are planning on increasing headcount, while only 8% anticipate having to decrease headcount. n Increase n Decrease n No Change 58% 56% 56% 63% 58% 25% 17% 24% 20% 29% 15% 3 6% 34% 8% 2011 2012 2013 2014 2015 I 7 I

Long Island is still held hostage by high cost of doing business ANNUAL RAISE 87% 88% 9 83% 85% 10% 2% 10% 2% 2% 5% 2% 7% 8% { 4% 9% { 2010 2011 2012 2013 2014 n Decreased Salaries n 0-4% n 5-9% n 10-14% n Greater Than 15% During the past 12 months, what was the average annual raise granted to your employees? This year there was a slight increase to 85% (versus 83% a year ago) in annual raises in the zero to four percent range. Respondents with employees who received raises between five and fourteen percent remained relatively steady at 10%. It is interesting to note that there are still some respondents (4%) that found it necessary to decrease salaries. I 8 I

RELOCATION 89% 89% 96% 95% 94% 7% 4% 6% 5% 3% 4% 4% 2% 2010 2011 2012 2013 2014 n No n Yes, to another area of LI n Off LI Are you planning to relocate any operations in 2015? The respondents apparently find value in having their businesses located on Long Island. The results show an overwhelming 98% will either stay in their current location or move to another facility on Long Island. Most large manufacturing and technology firms which employed large numbers of people have gone out of business or moved to more business-friendly states If the taxes on LI don't get lower soon, we will move. South Carolina I 9 I

GROWTH INDUSTRIES Small scale agribusiness Government 2% 2010 19% 32% 6% 19% 22% 2011 15% 35% 6% 16% 22% 6% 2012 18% 3% 37% 19% 17% 6% 3% 2013 5% 39% 16% 33% 4% 3% 2% 2014 7% 28% 8% 47% 5% n Tourism n Technology n Retail n Services n Health Care n Manufacturing n Other Which industry do you feel has the greatest potential for growth on Long Island? Surprisingly Health Care has moved into the number one spot with almost half of all respondents (47%) anticipating this to be the industry with the greatest potential for growth. Technology moves into the second spot as reported by 28% of the respondents. I 10 I

the market may stabilize MARKET INDICES 50% 52% 46% 32% 32% 27% 4 38% 35% 27% 26% 22% 24% 30% 18% 2010 2011 2012 2013 2014 n No Change n Up n Down Where do you think the S&P 500 index will go over the coming year? Respondents are slightly less optimistic about the S&P 500 this year over last year with 70% of the respondents (versus 78% in 2013) anticipating this index will either increase or remain the same over the coming year. I 11 I

REAL ESTATE What do you project will happen to residential real estate prices on Long Island in the coming year? The majority of respondents still appear to be optimistic about the residential real estate market. In fact, over half (53%) believe that prices will increase over the coming year. Slightly increased over last year, 12% of respondents (versus 8% in 2013) believe prices will decrease, while 35% believe prices will remain steady. n No Change n Up n Down 63% 49% 53% 42% 43% 46% 37% 35% 24% 27% 29% 15% 17% 8% 12% 2010 2011 2012 2013 2014 Do you own or lease the building from which you operate your business? 36% 46% 18% Almost half of all respondents (46%) own the building from which they operate over their business, over one-third (36%) have a long-term lease, with the remaining 18% holding a short-term lease on their business property. n Own n Short-term lease n Long-term lease I 12 I

Paving secondary and local roads in dire need before expansion of roads LONG ISLAND INFRASTRUCTURE 18% 14% 8% 60% Long Island s current transportation infrastructure is in dire need of expansion. Which major transportation artery should be updated first? Almost two-thirds of respondents (60%) feel that the Long Island Expressway should be the first transportation artery expanded. Respondents were almost equally split over the Southern State and Northern State Parkways with 18% and 14% respectively. n The Long Island Expressway n The Northern State Parkway n The Southern State Parkway n Other I 13 I

CURRENT EVENTS & ISSUES Lower property taxes dramatically so we can better compete on a global basis Has the global unrest (e.g. Middle East, Russia, Ukraine) had an impact on your business? Over one-quarter of our respondents (29%) have been impacted by the global unrest. However, the majority of respondents (7) have not been impacted at all. 2% 27% n Major impact n Some impact n No impact 7 18% Has your company experienced any cyber-attacks? Over three-quarters of our respondents (82%) have not experienced any cyber-attacks in their technology systems. 82% n Yes n No I 14 I

Are you planning any merger or acquisition activity within the next 12 months? Over one-quarter of our respondents (26%) are planning some type of either merger or acquisition activity during the coming year. 2% 18% n Merger n Acquire another entity n Looking to be acquired n N/A 74% 6% Do you offer your employees retirement planning seminars? The majority of businesses (63%) do not offer any type of retirement planning education for their employees. 37% n Yes n No 63% I 15 I

JUST FOR FUN Which team do you predict will win Super Bowl XLIX? Of the 32 teams in the NFL over half (18) were rated as possible Super Bowl winners. Of course New York fans (Jets and Giants combined) make up 13% of our responses. Once again this year the Broncos (33% vs. 43% last year) are favored to win it all. Hope your team wins! 33% 1 10% 9% 8% 6% 5% 3% 3% 3% 2% I 16 I

Who is/was THE best baseball player in the history of the game? While he hasn t appeared in a game since 1935, 43% of respondents believe that The Sultan of Swat, The Bambino George Herman Babe Ruth, Jr. reigns as the greatest baseball player in the history of a game that dates back to 1744 when it was first referenced in a book by John Newbery. The Captain, Mr. November - Derek Jeter comes in second with 12% of the votes. Babe Ruth 43% Derek Jeter 12% Joe DiMaggio 9% Willie Mays 8% Lou Gehrig 6% Mickey Mantle 4% Hank Aaron 4% Cal Ripken 2% Ted Williams Yogi Berra Ty Cobb Ken Griffey, Jr. Tony Gwynn Keith Hernandez Reggie Jackson Sandy Koufax Jackie Robinson Rusty Staub Darryl Strawberry Cy Young I 17 I

Editor Annette Esposito Marketing Director AVZ Page Layout & Design Mike Albano Creative Director Long Island Business News Writers Annette Esposito Marketing Director AVZ Thomas J. Murray, CPA Managing Partner AVZ Photography Jim Lennon Photographer Jim Lennon Photography, Inc. Printer Official Offset Corp. Celebrating 65 Years libn.com