Why are so many Valley businesspeople optimistic about 2008? In our last issue, we reported the results of a Business Journal-Miller, Kaplan, Arase & Co. survey concerning business growth in the new year. The survey was available to Miller Kaplan clients and Business Journal readers for a four-week period ending Dec. 17. The questions could be answered on a survey included in the Business Journal print publication or online through the newspaper’s and Miller Kaplan’s Web sites. There were a total of 248 respondents from throughout the Valley. That’s a pretty good number in these things. People answering survey questions were surprisingly upbeat about the future. I’m surprised because during the survey period and the weeks since then the economic and financial news has been getting worse and worse on a state and national level. The word recession is being thrown around much more freely by more people who know what they are talking about. The stock market has been tanking as of late. Retail has been in the doldrums. And consumers are usually the ones that keep us out of recession. The subprime mortgage crisis still has everyone rattled and they don’t feel the Fed is doing enough to make things better. Growth has slowed. I’ve heard lots of consumers saying that they are cutting back and don’t feel too good about things. The presidential candidates have jumped on that economic downturn bandwagon and are pandering for votes by using that as an issue. But the survey found quite different views with 51 percent of respondents saying they planned to add staff, mostly skilled labor. A majority anticipated higher revenues for their companies in 2008, nearly half by more than 10 percent. Nearly half also said their operating margins would increase up to 10 percent. A whopping 58 percent said they were planning on introducing new products and services this year at their businesses. So why the upbeat results? First of all, when you talk about the economy it’s never an exact science and conditions can vary from area to area. The Valley doesn’t always go along with the rest of the state or the nation. We often do better. Secondly, when people give their opinions about the economy, they are just that opinions. Also, when talking about plans for their businesses, perhaps the survey respondents were hoping things may get better in 2008. There’s nothing wrong with being hopeful. But I suspect there’s more to it than just being hopeful. We have a large number of professional services businesses such as law and accounting firms in our area. These tend to be more recession-proof. Ditto for health care and social assistance services that employ 80,000 people here, a huge chunk of our base. Yes, the entertainment industry is a huge employer here, too, and the writers strike has cast a huge cloud over many parts of this big Valley business community. But I suspect this is a variable that businesspeople almost have to take off the table when making plans for the new year. If the strike is not impacting your business, you ignore it. If it is affecting things, you have to adjust and hope for the best. Once again, our diverse economy here in the Valley helps us weather adverse conditions. Entertainment is a huge part of our economy but it doesn’t overshadow everything else. Many other industries will still thrive even if entertainment doesn’t. Miller, Kaplan’s George Nadel Rivin perhaps said it best when commenting about the survey results: “What the survey shows us is that the bad news is more vocal than the good news.” And you know with us media types, the person who is the loudest gets noticed first. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at [email protected] .
