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Negative thinking

In years past, Rochester-area executives often were among the most optimistic in the Siena College Research Institute’s annual Upstate New York Business Leaders Survey. But not now. 

As outlined in last week’s paper, and described in more detail by SRI director Donald Levy at Friday’s RBJ economic outlook breakfast event, the view here is decidedly more pessimistic than in Albany, Buffalo and Syracuse. In fact, confidence locally fell compared with a year ago, while it rose elsewhere.
What explains the downbeat sentiment in this region? Asked about the challenges facing their firms, local executives most often cited health care costs, government regulation and taxation. But those are the top three concerns throughout the upstate region, with roughly the same degrees of intensity.
In terms of hiring, 90 percent of Rochester-area survey participants said they expect to keep employment steady or increase it. That also aligns closely with their upstate peers.
The gap widened when executives were asked about revenue and profit expectations. Nonetheless, most local respondents expect to do as well or better on the top and bottom lines in 2017.
Yet in SRI’s analysis, Rochester was the only upstate region where executives’ overall, current and future confidence registered below 100—signaling more pessimism than optimism. Overall confidence in Rochester was 88.7, versus 89.4 a year ago.
Panelists at the RBJ event offered possible explanations for the more negative sentiment here. Among them: Local firms might do a higher percentage of business out of the area and thus see the faster pace of growth in other parts of the country. And since Rochester is more heavily invested in exports and international trade, President Donald Trump’s talk of higher tariffs and renegotiating trade deals might concern them.
It’s also possible, however, that pessimism has become self-reinforcing. Without confidence, it’s difficult to seize opportunities that involve some risk. A bit more optimism might be just what some businesses and the local economy need.
2/3/2017 (c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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