Execs More Pessimistic on O.C. Business Expansion

Orange County business executives expect improved financial performance for their companies in 2003 but have grown more pessimistic about expanding operations in the county given high costs and growing traffic congestion.

An annual survey of Orange County executives by the UC Irvine Graduate School of Management, released Monday, found that executives are cautiously upbeat about their short-term prospects but increasingly dissatisfied with the county as a place to do business over the long run.

The telephone survey of 302 business executives across a variety of industries showed that 58% expect improved financial performance in 2003. That’s less optimistic than last year, when 68% thought their bottom lines would improve.

Fewer businesses in Orange County plan to beef up their local operations. In the survey, 58% said they expect to add employees, equipment or facilities over the next five years, compared with 70% of those who responded to the poll last year.

Fully one-quarter of those surveyed this year said they were considering relocating outside Orange County, compared with 19% last year. And 16% said they planned to downsize their Orange County operations over the next five years, compared with 14% in 2002.

Company executives expressed much more dissatisfaction with Orange County’s business climate. This year, 29% said that the county is becoming a less attractive place to do business, up sharply from 12% last year. Of those expressing negative views, 27% mentioned burgeoning traffic as a damper on business, and 17% pointed to the high cost of housing.

Regarding overall barriers to doing business, the skyrocketing cost of workers’ compensation emerged as the top complaint of Orange County executives, with 7 of 10 saying that it was having a moderate or severe effect on their firms.