Inflation, Ukraine temper optimism about LI's economy

Consumers’ concern about rising fuel and food prices is tempering the optimistic predictions of Long Island CEOs for economic growth this year, a pollster said on Friday.

More than six in 10 CEOs  said the economy of Nassau and Suffolk counties would be “better overall” this year than in 2021 in a survey conducted between Nov. 18, 2021 and Jan. 4 by PKF O’Connor Davies accountants and the Siena College Research Institute. The poll had 270 respondents.

More than five in 10 CEOs said they expect their company’s sales and profit to increase over last year’s levels, according to the poll results, which were presented at an event organized by the HIA-LI business group in Hauppauge.

However, “in spite of this resounding optimism that was expressed in the survey, there are some bumps in this road to recovery that we are currently traveling on,” said Siena pollster Don Levy.

He continued, “Consumers are dramatically concerned about increasing energy costs, increasing food costs – and they say they intend to watch their spending. Add to that the war in Ukraine and we face some challenges in this year ahead.”

Levy, who joined a panel of four CEOs for the HIA-LI event, cited a separate Siena poll of 104 Long Island consumers where 72% said they planned to reduce their spending because of inflation. That survey was conducted March 14-17.

Kevin O’Connor, CEO of Dime Community Bank, said the rise in consumer prices “is a problem” and the Federal Reserve’s planned interest-rate hikes to address inflation could cause a recession.

“We may feel some pain along the way that might be necessary to end these inflationary pressures,” he said.

In the PKF/Siena poll, two-thirds of local business leaders said it was somewhat likely that a national recession would take place before year’s end.

Richard Humann, president and CEO of H2M architects + engineers, said he remains optimistic about the immediate future.

“All these things have us feeling a little bit more cautious than I believe we should,” he said, referring to inflation and the Russia/Ukraine conflict.

Humann, who leads the HIA-LI board, also said finding and retaining skilled workers is a challenge for professional firms like his. In the PKF/Siena poll, 62% of CEOs said there isn’t “an ample supply” of trained workers on Long Island.

Edward Bonahue, president of Suffolk County Community College, said it wants to work with employers to design training programs that produce job candidates.

He also said SCCC is trying to convince new immigrants of the value of obtaining a degree, certificate or apprenticeship. "We're trying to explain to families that this is an investment that you make in the future, a pathway to the middle class," he said.

Though few in the hotel ballroom wore masks, COVID-19 was on the minds of the 150 attendees.

“I do believe we’re passed the worst of it,” said Dr. Patrick O’Shaughnessy, president and CEO of Catholic Health Services of Long Island, responding to a question. “But that doesn’t mean that we may not get additional small blips and spikes…We’re moving in the right direction.”

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.