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Leaders see opportunities and challenges

Rochester Business Journal
January 24, 2014

Despite an overall decline in CEO confidence in the Rochester area, some local business leaders say there are opportunities for improvement in the coming year.

“It depends on what sector you’re in,” said John Hurley, president of Web Seal Inc. “Certainly manufacturing in Rochester is still taking some hits.”

Web Seal manufactures die-cut parts and distributes industrial sealing components. Hurley said the company primarily supports the manufacturing sector and the growth Web Seal is anticipating this year likely will come from customers outside the Rochester area.

“What we’re seeing is manufacturing to core industrial customers is pretty sluggish,” he added. “We’re not terribly optimistic.”

However, he said, customers who support construction and those in the automotive sector are operating in a healthy business climate and that seems likely to continue through this year. Semiconductor and nanotech customers also are doing well.

“It’s kind of a mixed report,” Hurley said. “From our perspective it’s very industry- or very sector-specific in terms of what’s going on.”

Rochester business leaders are being cautious, said Phil Brooks, president of Power and Construction Group Inc., a family of construction, power, transportation and environmental companies in Scottsville.

“The business climate in Rochester, the opportunity to improve is great,” Brooks said. “It’s a matter of if we take advantage of that. Very few people are making huge investments.”

His businesses have had steady growth in the last four years, he said, and he expects 2014 to be no different, with revenue and staffing increases.

“We are solid; we’ve got a good customer base,” Brooks added. “No home runs, just singles.”

Donald Chesworth, managing partner of Harris, Chesworth, O’Brien, Johnstone & Welch LLP, said he does not anticipate an improvement in Rochester’s business climate in the coming year, but it may remain stable.

“A lot of it depends on the level of government taxation and government regulation,” he said. “As most surveys have shown, New York is the worst or next-to-worst business-friendly state.”

Despite some past downsizing, Chesworth expects his organization to hold steady in 2014. One thing that can be done to improve CEO confidence and the business climate locally is to lower the tax rates for both individuals and businesses.

“It would slow the exodus of people from New York,” Chesworth said. “It would help the retirees feel more comfortable staying here. And I think it would cause businesses to be more willing to move here, rather than looking for other places to go where they can operate less expensively.”

Brooks said health care costs and government regulations are problematic.

“Some of the regulations don’t make sense; they’re arbitrary,” he said. “We don’t want to do away with government. We’d like them to be less involved in our business.”

Hurley also noted that health care costs and taxation are concerns for local business leaders.

“I think the uncertainty about what’s happening with health care,” he said. “It’s hard to do a lot of planning around heath care.”

Hurley is pleased with some changes being made in personal income taxes to make New York more attractive to individuals and businesses.

It would be easy to blame taxes and regulations for a stagnant business climate, Hurley said, but the problem is more complex than that.

Hurley takes satisfaction that organizations such as Paychex Inc., the University of Rochester Medical Center and Windstream Corp. are doing well, though they are not customers of his.

“They don’t use a piece of rubber in anything they do, but the reality is they bring good-paying jobs to the community. In the end, the community is going to benefit from that,” Hurley said. “We all benefit from having any individual sector prosper.”

1/24/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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