A new Los Angeles County Business Federation (BizFed) survey shows that two-thirds of employers believe business conditions will improve over the previous year. While 10% more employers expect to hire more people in 2015, 28% more expect to invest in new equipment.
The annual survey of 135 BizFed member organizations representing 268,000 employers with 3 million employees finds:
- 66% believe business conditions will improve this year
- 59% plan to make capital investments in durable goods, up 28% from 2014
- 40% plan to hire this year, marking a 10% increase over 2014
Strong concerns surface about high taxes and fees, increased government regulations and compliance, and cumbersome local permitting processes. For the fifth year in a row, taxes and fees top the BizFed survey as the highest-priority concern for employers. Government regulations and compliance moved up from the fifth highest concern last year to the number two concern this year. Local permitting processes leaped from the 13th highest concern last year to the number three concern in 2015. Reducing commute times and costly environmental regulations rounded out the top 5 concerns. Another surprise was the seven-place jump in concern about crime.
The City of Los Angeles stood out again as being cited most frequently by employers as unfriendly. Santa Clarita and Glendale were ranked in the top 5 most business friendly cities, which is notable because officials from those two cities are actively courting City of Los Angeles businesses in light of the proposed City of Los Angeles minimum wage increase.
The overwhelming majority of survey participants were small businesses. Eighty-two percent of survey participants have 100 or fewer employees. The survey found that the impact of a minimum wage hike would be most acute for those small businesses. Thirty-five percent of businesses located inside the City of Los Angeles responded that a minimum wage increase would force them to cut jobs or employee hours. Among businesses meeting the Federal definition of a small business (500 or fewer employees), 65% indicated negative impacts from the Affordable Care Act, either from increased health care costs or reduced employees or employee hours.
Additionally, survey participants identified the following as the top three factors driving businesses to leave or choose not to locate in Los Angeles County:
- High taxes and fees
- Regulatory environment
- Housing costs (Housing costs are particularly acute for small businesses with 10 employees or less)
“With results indicating that 24% of businesses plan to expand in 2015, we need to fully capitalize on our projected business growth in Los Angeles County, by controlling high taxes and fees, while more urgently meeting public infrastructure needs vital to moving people, goods, and water,” said MC Townsend, BizFed Chair and CEO of the Regional Black Chamber of Commerce of San Fernando Valley.
“It’s no surprise that so many Los Angeles based small business owners are fearful of a minimum wage increase, especially given the local nature of the ordinance,” said David Fleming, BizFed Founding Chair. “With results as staggering as 35% of businesses located in the City of Los Angeles indicating they will be forced to reduce employees or employee hours if an LA City minimum wage ordinance passes, and 21% of businesses outside of the City indicating this will be good for their business, we need to evaluate the impact this will have on the local economy.”
“We have a real opportunity to expand and strengthen key industries in 2015,” said Tracy Rafter, Founding CEO of BizFed. “Job growth needs to remain a high priority for all 88 cities in Los Angeles County and California as a whole to ensure all of this strong economic potential will continue to enhance our region and not move elsewhere.”
The BizFed poll guides nonpartisan conversations with officials across the government, private, and nonprofit sectors. A full look at the 2015 poll is available by clicking here.
INTERVIEWS AVAILABLE
- David Fleming, BizFed Founding Chair, david.fleming@lw.com, (213) 891-7902
- MC Townsend, BizFed Chair, Regional Black Chamber of Commerce of the San Fernando Valley, rbccinfo@yahoo.com, (818) 464-3484 x95
- Tracy Rafter, BizFed Founding CEO, trafter@bizfed.org, (818) 429-0462
- Kristine Guerrero, BizFed Polling and Research Committee Co-Chair, League of Cities California, kguerrero@cacities.org, (626)716-0076
- Brad Jensen, BizFed Polling and Research Committee Co-Chair, San Gabriel Valley Economic Partnership, bjensen@valleyconnect.com, (626) 856-3400
- Sandy Sanchez, BizFed Polling and Research Committee Co-Chair, Newhall Land, ssanchez@newhall.com, (661) 255-4045
Methodology: Online survey conducted March 3 through April 15, 2015 and distributed throughout BizFed membership and, by extension, their member networks. Survey respondents totaled 596, representing a 95% participation rate among BizFed’s 135 member organizations at the time. Respondents represent a cross-section of BizFed members and reflect a balanced representation of LA County businesses based on employment size, industry, and location. Survey developed by Employers Group’s Research Department, the BizFed Polling/Research Committee, and the BizFed Board of Directors. Employers Group is a California-based association of employers.
