Businesses in Southern California are increasingly optimistic, with most expecting better revenue this year and even higher sales in 2015, according to a new report.
The vast majority expect to maintain or boost their investments in leases, contracts and other long-term commitments, according to the survey. Nearly all expect to do the same with their marketing and sales budgets.
The percentage of businesses who expect to trim full-time head counts is in the single digits, with business and professional services most likely to anticipate boosting hiring. More than a third said they’re planning to bring on additional part-time workers.
The survey was commissioned by Los Angeles financial institution CTBC Bank Corp. and conducted by FTI Consulting from 432 respondents at businesses with 1,000 employees or fewer.
“This was the black-and-white, graphic proof of the optimism,” said Noor Menai, chief executive of CTBC. “This really comes from the ground up – you’re talking about the lifeblood of the U.S. economy in small businesses.”
Doing business in Southern California has some major advantages, respondents said. The workforce is enormous and the education level of workers is higher than it is in most other places.
And manufacturers especially said the easy access to national and global markets through extensive transportation networks was key.
“There was a gestation period. We saw during the crisis that a lot of business left the country or went dormant,” Menai said. “But they’ve started seeing the right things happen in recent years. It’s coming together.”
But the sense of cheer among local businesses is tinged with reservations.
More than 7 in 10 respondents said it’s difficult to find and retain workers with desirable skill sets.
Two-thirds said they had to alter their business strategy to draw talent. Many suggested that companies increase on-the-job training while also encouraging educational institutions to direct students into disciplines most needed by employers.
Many complained that tight capital and cash-flow problems were holding them back from starting new businesses, as were high labor costs. Government taxes and regulations at the state level were also troublesome, as was the cost of real estate and facilities.
Half of the survey respondents said they were located in Los Angeles County. More than a third hailed from Orange County or San Diego. The rest came from the remaining Southern California counties.
Six in 10 respondents said they were managers; the rest said they were owners. Manufacturers made up 15% of participants; professional services constituted 10%. The rest included business and financial services, construction, information technology and other companies.
The largest percentage of respondents – 19% – said they had revenue of $5 million to $10 million each year.