Lee County Business Climate Survey Report. Fourth Quarter, 2014

Transcription

1 Lee County Business Climate Survey Report Fourth Quarter, 2014 Prepared by: Regional Economic Research Institute Center for Leadership & Innovation Lutgert College of Business Florida Gulf Coast University November 21, 2014

2 Introduction The Horizon Council FGCU Business Climate Survey continues 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 information and feedback on key issues and concerns to the business community, elected officials, and citizens. In addition to the economic questions, the survey gathered information on local wellness initiatives and programs in support of the Horizon Council s Healthcare Taskforce. One of the key features of this survey is the calculation of an Executive Business Climate Index (EBCI). This index provides a single summary number allowing one to quickly gauge the current and future business climate in Lee County. This survey would not have been possible without the assistance of Glen Salyer and Brent Kettler, of 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; and Gary Griffin, Chair of the Horizon Council s Healthcare Taskforce. Anna Umstead, an FGCU student research analyst, was instrumental in analyzing the survey information and co-authoring the report. The business climate index for the fourth quarter dropped from 72 to 69 indicating an encouraging but slightly less optimistic view of future growth for the local economy. The survey also provided insights into the impact and use of wellness programs or initiatives. Gary Jackson Dr. Gary Jackson Director, Regional Economic Research Institute Lutgert College of Business Florida Gulf Coast University FGCU Boulevard South Fort Myers, Florida gjackson@fgcu.edu Fourth Quarter, 2014 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 544 executives in Lee County. Sixty-nine executives completed the survey from October 20, 2014 to November 4, Two 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 Climate Survey for the first quarter of 2014 are: The Lee County Business Climate Index was 69 for the fourth quarter survey (November 2014), which is a decline from 72 in the third quarter (July 2014); 76 percent of executives stated that the current economic conditions have improved over last year; 76 percent of the executives expect the economy to improve over the next year; 66 percent of the executives stated that the current economic conditions for their industry have improved over last year, while 25 percent stated that economic conditions remained approximately the same; 71 percent of executives expect economic conditions for their industry to improve over the next year; 85 percent of executives had increased employment over the last year, while four percent had reduced employment; 59 percent of executives expect to increase employment at their companies during the next year and only one percent of executives expect to reduce employment; 61 percent of companies expect to increase investment next year and two percent expect to reduce their investment levels; 44 percent of executives indicated that their companies offer wellness programs or initiatives; Fourth Quarter, 2014 Page 3

4 57 percent of executives have added benefits to their wellness program or initiative over the last year while 13 percent no longer offer a wellness program or initiative; Businesses top wellness program or initiative offerings include: 1. Health educational programs; 2. Alcohol/drug-abuse assistance/education; 3. Health screening or health risk assessment program; 4. Nutrition/weight assistance/education programs; 5. Stress management/education programs; and 6. Fitness programs; 57% of companies added benefits to their wellness program; 30% made no changes; and 13% no longer offer an employee wellness program; 52 percent of executives indicated that a wellness program or initiative improved culture and employee retention; 33% indicated that it improved productivity and output; and 22% indicated that it increased overhead costs; The top reasons given for not offering a wellness program or initiative are: 1. Lack of personnel to develop and/or oversee such a program (42 percent); 2. Program costs (22 percent); 3. Unfamiliar with wellness programs or initiatives (11%); 4. Not important to business (8%); and 5. Previous negative experience (3%); 49 percent of executives believe they will realize a net benefit from offering a wellness program or initiative in two years or less. Fourth Quarter, 2014 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. Wellness Program or Initiative IX. Top Wellness Programs or Initiatives Offered XI. Wellness Program or Initiative Changes Over the Last Year XII. Wellness Program or Initiative Impacts XIII. Reasons for Not Offering a Wellness Program or Initiative XIV. Time to Realize Net Benefits XV. Wellness Program or Initiatives Changes XVI. Other Comments, Suggestions, or Recommendations? XVII. Company Characteristics Appendix A: Describe changes made to your wellness program Appendix B; Comments, suggestions, and recommendations regarding local economy or your business Fourth Quarter, 2014 Page 5

6 I. Current Economic Conditions How are the current Lee County economic conditions compared to one year ago? As shown in Figure 1 and Table 1, seven percent of the executives indicated that there were substantial improvements in the overall economic conditions, 69 percent reported that they experienced moderately better economic conditions, and 15 percent indicated that conditions were unchanged from a year ago. Nine percent of the executives indicated that economic conditions were moderately worse. Figure 1: Current Economic Conditions Table 1: Current Economic Conditions Number Current Economic Conditions of Responses Percent Substantially better 5 7% Moderately better 47 69% Same 10 15% Moderately worse 6 9% Substantially worse 0 0% Total % Fourth Quarter, 2014 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 in the Lee County economy, 66 percent expect moderately better economic conditions, 19 percent expect economic conditions to be unchanged, and four percent of executives indicated that they expect economic conditions to be moderately worse. Figure 2: Future Economic Conditions Table 2: Future Economic Conditions Next Year Economic Conditions Number of Responses Percent Substantially better 7 10% Moderately better 45 66% Same 13 19% Moderately worse 3 4% Substantially worse 0 0% Total % Fourth Quarter, 2014 Page 7

8 III. Current Industry Economic Conditions What are your current conditions in your industry in Lee County compared to one year ago? As shown in Figure 3 and Table 3, 13 percent of executives indicated that current conditions were substantially better for their industry, 53 percent felt conditions were moderately better, 25 percent felt conditions were the same as last year and nine percent felt conditions were moderately worse. No executives felt 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 9 13% Moderately better 36 53% Same 17 25% Moderately worse 6 9% Substantially worse 0 0% Total % Fourth Quarter, 2014 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, nine percent of executives indicated that conditions are expected to be substantially better next year, 62 percent expected that conditions would be moderately better, 25 percent expected conditions would be approximately the same as this year, three percent expected conditions to be moderately worse, and one percent 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 6 9% Moderately better 42 62% Same 17 25% Moderately worse 2 3% Substantially worse 1 1% Total % Fourth Quarter, 2014 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, 44 percent of executives indicated that their companies substantially increased employment, 41 percent moderately increased employment, 10 percent had little or no change in employment, three percent had moderately reduced employment, and one percent of executives indicated that they had substantially reduced employment. Figure 5: Employment Changes Over the Last Year Table 5: Employment Changes Over Last Year Number Hiring Over Last Year of Responses Percent Substantially increased employment 30 44% Moderately increased employment 28 41% Little or no change in employment 7 10% Moderately reduced employment 2 3% Substantially reduced employment 1 1% Total % Fourth Quarter, 2014 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, four percent of companies expect to substantially increase employment over the next year, 55 percent expect to moderately increase employment, 39 percent expect little or no change in employment, one percent expect to moderately reduce employment, and no companies 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 3 4% Moderately increase employment 37 55% Same or flat employment 26 39% Moderately reduce employment 1 1% Substantially reduced employment 0 0% Total % Fourth Quarter, 2014 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, 10 percent of executives indicated that their companies expect to substantially increase investment next year, 51 percent are planning to moderately increase investment, 35 percent expect to keep investment levels the same, one percent expect to moderately reduce, and one percent to substantially reduce investment levels over the next year. Figure 7: Expected Investment Changes Over Next Year Table 7: Expected Investment Changes Over Next Year Number Investment Expenditures During Next Year of Responses Percent Substantially increase investment 7 10% Moderately increase investment 35 51% Keep investment the same or flat 24 35% Moderately reduce investment 1 1% Substantially reduce investment 1 1% Total % Fourth Quarter, 2014 Page 12

13 VIII. Wellness Program or Initiative Does your company offer a wellness program or initiative? As shown by Figure 8 and Table 8, 44 percent of executives indicated that their company offers a wellness program or initiative and 56 percent do not offer a wellness program or initiative Figure 8: Wellness Program. Table 8: Wellness Program. Does your company offer a wellness program or initiative? Number of responses Percent Yes 30 44% No 38 56% Total % Fourth Quarter, 2014 Page 13

14 IX. Top Wellness Programs or Initiatives Offered Does your wellness program offer the following? As shown by Figure 9 and Table 9, 72 percent of executives with a wellness program or initiative indicated that they offer health educational programs, 66 percent offer alcohol/drug-abuse assistance/education, 66 percent offer health screening or health risk assessment program, 55 percent offer nutrition/weight assistance/education programs, 52 percent offer stress management education/programs, 48 percent offer fitness programs, and 14 percent of executives indicated that their wellness programs or initiatives have other types of offerings. Figure 9: Top Wellness Program or Initiative Offerings. Table 9: Top Wellness Program or Initiative Offerings Top Wellness Program or Initiative Offerings Number of Responses Percent Health educational programs 21 72% Health screening or health risk assessment program 19 66% Alcohol/drug-abuse assistance/education 19 66% Nutrition/weight assistance/education programs 16 55% Stress management education/programs 15 52% Fitness programs 14 48% Other 4 14% Number of Executive Responses 29 Number of items selected 108 Fourth Quarter, 2014 Page 14

15 XI. Wellness Program or Initiative Changes Over the Last Year How have you changed your wellness program or initiative over the last year? As shown by Figure 10 and Table 10, 57 percent of executives indicated that their companies added benefits to existing programs, 30 percent had no changes to the existing program, 13 percent no longer offer an employee wellness program, and no executives reported a decrease in benefits or started a new employee wellness program or initiative over the last year. Figure 10: Wellness Program or Initiative Changes Over the Last Year. Table 10: Wellness Program or Initiative Changes Over the Last Year. How have you changed your wellness program over the last year? Number of responses Percent Added benefits to existing program 17 57% No changes to existing program 9 30% No longer offer an employee wellness program 4 13% Decreased benefits to existing program 0 0% Started a new employee wellness program (no previous program) 0 0% Total % Fourth Quarter, 2014 Page 15

16 XII. Wellness Program or Initiative Impacts How has your wellness program or initiative impacted your company? As shown by Figure 11 and Table 11, when asked how their wellness program or initiative impacted their company, 52 percent of executives indicated that it improved company culture and employee retention, 33 percent experienced improved productivity and output, 22 percent increased overhead due to cost of program, 7 percent had decreased overhead due to savings in other areas, and 15 percent experienced other types of impacts on their company. Figure 11: Wellness Program or Initiative Impacts. Table 11: Wellness Program or Initiative Impacts. How has your wellness program impacted your company? Number of Responses Improved culture and employee retention 14 52% Improved productivity and output 9 33% Increased overhead due to cost of programs 6 22% Other 4 15% Decreased overhead due to savings in other areas such as insurance 2 7% Decreased productivity and output 0 0% Number of executives responding to this question 27 Number of items selected 35 Percent Fourth Quarter, 2014 Page 16

17 XIII. Reasons for Not Offering a Wellness Program or Initiative What is the primary reason your company doesn t offer a wellness program or initiative? As shown by Figure 12 and Table 12, 42 percent of executives indicated that a lack of personnel to develop and/or oversee such a program was their top reason for not offering a wellness program or initiative, 22 percent indicated program costs, 11 percent indicated unfamiliarity with offering such a program, 8 percent indicated it was not important to their business, three percent indicated a previous negative experience, and 11 percent of executives indicated that they had other reasons for not offering a wellness program or initiative including timing, economic downturn, and priorities. Figure 12: Top reasons for not offering a wellness program or initiative. Table 12: Top reasons for not offering a wellness program or initiative. Number of The primary reason that a wellness program or initiative is not offered is: Responses Percent Lack of personnel to develop and/or oversee such a program 15 42% Program costs 8 22% Unfamiliarity with offering such a program or "we don't even know where to begin" 4 11% Other 4 11% It is not important to our business 3 8% Previous negative experience 1 3% Total number of responses % Fourth Quarter, 2014 Page 17

18 XIV. Time to Realize Net Benefits What is your estimate for the amount of time to realize a net benefit from a wellness program or initiative? As shown by Figure 13 and Table 13, out of the 14 executives who responded to this question, 21 percent indicated that they expect to realize a net benefit in a year, 14 percent expect to realize a benefit in one to two years, 14 percent expect to realize a benefit in two years, 14 percent expect to realize a benefit in three years, 7 percent expect to realize a benefit in five years, and 29 percent of executives are unsure of the time frame it would take to realize a net benefit from a wellness program or initiative. Figure 13: Time to Realize Net Benefits. Table 13: Time to Realize Net Benefits Time Frame Responses Percent 1 year 3 21% 1-2 years 2 14% 2 years 2 14% 3 years 2 14% 5 years 1 7% Unsure 4 29% Total Responses % Fourth Quarter, 2014 Page 18

19 XV. Wellness Program or Initiatives Changes Please briefly describe changes you may have made to your wellness program over the last year. The executives responses to this question fell into following areas: New iphone app, links to other electronic wellness devices; Nutrition, health, and fitness education; Smoking cessation, Zumba, and weight-loss classes; Cash incentives; and Company-based team sport activities. *Executive responses for this question are found in Appendix A. XVI. Other Comments, Suggestions, or Recommendations? Other comments, suggestions, or recommendations you would like to make regarding the regional economy or your business? The executives responses to this question fell into following areas: Increase the focus on environment and natural capital; Need to increase density in certain developments; Markets still in recovery; Lack of qualified employees; and Need to create additional job opportunities. *Executive responses for this question are found in Appendix B. Fourth Quarter, 2014 Page 19

20 XVII. 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 15: Business Type Fourth Quarter, 2014 Page 20

21 Figure 16: Employee Size of Firms Responding to the Survey Figure 17: Geographic Location of Survey Respondents Fourth Quarter, 2014 Page 21

22 Figure 18: Geographic Client Base Fourth Quarter, 2014 Page 22

23 Appendix A: Describe changes made to your wellness program. The following list includes specific responses from the executives for the question- Please briefly describe changes you may have made to your wellness program over the last year. 1. Downloaded new app to iphones. Links with our HRA and biometric screening results. Individual health notices sent via . Links with fitbit and other electronic wellness devices. 2. Cash incentive to quit smoking, get a physical and work towards healthy BMI. 3. $500 incentive for wellness screening, added costs for tobacco users, educational programs around health and fitness, and insurance premiums remain flat for 2015 as a result of programs 4. New insurance company Atena has large focus on wellness 5. Smoking cessation classes; Zumba classes; weight-loss classes 6. Added nutrition education. 7. We have simply added more activities based on employee interest. For example, we support company-based team sports: volleyball and flag football. Appendix B; Comments, suggestions, and recommendations regarding local economy or your business. The following list includes specific responses from the executives for the question- Please indicate any other comments, suggestions, or recommendations you would like to make regarding the regional economy or your business: 1. Improvements in the market are in specific niche markets and not yet industry wide. 2. It is important that our County Commissioners understand that increasing density in developments with the adequate infrastructure in place to service the increase is a good thing. Perfect example is River Hall. I hope they support the increase. 3. Our business is conservation of wildlife, preservation of aquatic resources and research. Without a healthy environment, the only thing going for Lee County would be a pleasant climate. Our natural resources give us a unique niche. It should be acknowledged as important to local economy. 4. Last year was a 50% growth. We invested in new trucks and equipment. Going forward our sales are up and the outlook is good. Cannot find help. 5. It is incredibly difficult to find qualified candidates. 6. We have invested heavily in our facility. Part of this was deferred maintenance; part was expansion to improve our product and to facilitate better work-flow. 7. We should be mindful on the growth SW Florida is experiencing to insure that we do not relapse into an economic flop. Making sure that prices for housing (new or used) stay moderate to accommodate the average national income. Fourth Quarter, 2014 Page 23

24 Additionally, it will continue to be important to concentrate on bringing more job opportunities to our area, which will relieve the economic taxable impact needed to support the infrastructure (roads, utilities, storm water) which currently in large is being made by residential roof top taxes. Our local governments in SW Florida are concentrating more on raising taxes and not on creating new jobs. Our current growth will not continue to prosper if we don't bring relief to the residential rooftops who, according to my calculations, provide 90% of the city and counties income in taxes. Perfect example is Cape Coral. 8. Not sure what is driving some of the upswing in development as housing markets across the country are not in a great position to allow people to flow into our boarders, i.e. retiring population. 9. The continued reduction in the unemployment rate due to available jobs and the overall improvement in the local economy will continue to make hiring a challenge. As it was in the 'housing boom' attracting and employing qualified staff remains a challenge. As construction continues to escalate, the general employee pool becomes diminished. When the demand increases for qualified staff, the pay rates will increase to attract employees causing profit margins to shrink. Overall, the region needs a strong focus on recruitment of skilled trades. In the solid waste industry, not only are driving positions in demand, but qualified diesel technicians are in greater demand. Solid waste is a constant business, yet the construction business can vary based upon demand. Contractors will offer the rates needed to hire away employees to get the jobs completed at the expense of the final consumer. Being somewhat regulated and not having the ability to adjust rates as needed, one can see the challenge. Fourth Quarter, 2014 Page 24