LONG ISLAND ECONOMIC SURVEY & OPINION...

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LONG ISLAND ECONOMIC SURVEY & OPINION POLL

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It’s been a year crammed full of hot topics in the economy, the news, politics, and the world. Here on LongIsland, our headlines included steady job growth, lower energy prices, a stronger commercial and residentialhousing market, an increase in consumer spending, and a growth in retail sales, just to name a few. All in all,we are seeing a cautious, steady economic optimism from business owners, as we continue to rebound andrecover from the 2008 financial crisis.

Enclosed within, are the results of our 22nd annual Long Island Economic Survey and Opinion Poll. We fullyrecognize that if it were not for the Long Island business community, we would never have come this far. Weare so grateful to our prestigious sponsors, respondents, and to the business men and women who turn outeach year to attend our results breakfast. You are the reason we want to make this survey bigger and betteryear after year.

We appreciate your interest in our questionnaire and survey results, but most importantly your ongoingcommitment to the Long Island business community. We hope you will find this data beneficial as it reflects theexperiences of our local business owners, who are the foundation upon which our Long Island economy is built.

Highlights

➢ The National economic confidence rating increased from 5.8 to 6.1.

➢ The Long Island economic confidence rating also increased from 5.7 to 6.1.

➢ 63% of respondents realized an increase in revenue in 2015.

➢ 90% increased prices for products or services in 2015.

➢ 46% of respondents plan to increase headcount in 2016.

➢ 64% of businesses will not be impacted by an increase in the minimum wage.

➢ 47% of businesses have some type of succession plan in place.

➢ 68% have had to alter their retirement plans due to the lingering effects of the 2008 recession.

➢ 96% of respondents feel that the U.S. will be impacted by the struggling global economies.

➢ 28% believe the Patriots will win Super Bowl 50.

We are continually grateful that our survey is used as a reference tool for countless business men and womenthroughout Long Island. As you read through this data, we hope you feel as optimistic about the future as manyof our respondents appear to feel. We haven’t seen such optimistic results since prior to 2008.

Once again, thank you so much for your participation and we welcome your comments or feedback as we moveto create a more valuable survey for you each year. Best wishes for growth and success in 2016.

Sponsored by


The results of the 2016 Long Island EconomicSurvey and Opinion Poll were compiled by AVZ.An electronic survey was sent out to Long Islandbusiness men and women in mid-October 2015.The survey was closed on November 18th andthe responses were tabulated at that time.

Almost half (49%) of the respondents maintaintheir business operations in Suffolk County, overone quarter (26%) are in Nassau County, with15% having facilities in both locations and 10%elsewhere.

An overwhelming majority (84%) has been inbusiness for more than 10 years and 53% haveoperated for over 30 years.

The majority of respondents (82%) reported totalemployee headcount of less than 250, with overhalf (60%) employing less than 50 people.

WHERE IS YOUR PRINCIPALPLACE OF BUSINESS?

HOW MANY YEARS HAS YOURCOMPANY BEEN IN BUSINESS?

HOW MANY EMPLOYEESDO YOU HAVE?

DEMOGRAPHICS

I 3 I

■ Nassau County

■ Suffolk County

■ Both

■ Elsewhere

■ 0 to 5

■ 6 to 10

■ 11 to 20

■ 21 to 30

■ Over 30

■ Less than 25

■ 25-49

■ 50-74

■ 75-99

■ 100-249

■ 250-500

■ Greater than 500

26%

49%

53%

49%10%

14%

17%

13%

11%

7%9%

6%

15%

10%

6%

5%


I 4 I

TYPE OF BUSINESS

CONFIDENCE IN THE NATIONAL ECONOMY

ECONOMIC CONFIDENCE RATINGS

■ Health Care

■ Manufacturing

■ Distribution

■ Technology

■ Construction

■ Retail

■ Professional Services

■ Other Services

■ Other

IS YOUR BUSINESS PUBLICLYOR PRIVATELY OWNED?

■ Publicly Owned

■ Privately Owned

6%

30%

34%

2%

3%

5%9% 2%

9%

82%

18%

6.0 6.5 6.2

4.5 5.1 5.0 4.5 4.75.5 5.8 6.1

Our respondents represent a very diverse cross section ofindustries. Over one-third of the respondents (34%) catego-rized their industry as “Other”.

Privately held businesses represent 82% of the respondents.

We asked “On a scale of 1-10 with 10 being the most confident, rateyour confidence in the National economy”.

This is the eleventh consecutive year we measured the National economic confidence rating. Our results show confidence on a National level has increased over the last year from 5.8 to a 6.1 rating,which is the first time since 2007 that we have hit a rating above six.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

"...even as we emerge everyone seems to bemore cautious with spending and investing."


CONFIDENCE IN THE LONG ISLAND ECONOMY

We asked “On a scale of 1-10 with 10 being the most confident, rateyour confidence in the Long Island economy”.

Confidence in the Long Island economy is equally as optimistic as theNational rating with an increase to 6.1 from 5.7 last year. This is thefirst time we have hit a rating above 6.0 since 2007.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

5.06.0

6.6 6.8 7.2 7.26.6 6.3 6.7 6.7

6.0 6.1 6.1 6.14.9 5.2 5.0 5.1 4.9

5.6 5.7

"Volatility is always with us. We choose to keep our heads down, work hard and push through the noise. We have survived more than one downturn in the market. . ."

I 5 I


I 6 I

■ No Change ■ Less Than Prior Year ■ 1-5% ■ 6-10% ■ 11-15% ■ 16-20% ■ 21-25% ■ Greater Than 25%

REVENUE

With regard to 2016, 61% are forecasting some increase in revenue versus 63% last year. Remainingsteady from the prior year, 13% anticipate less revenue in 2016 than 2015. A greater number ofrespondents, 26% this year versus 24% last year, project revenue to be stable in 2016.

How does your revenue projection for 2016 compare to the actual revenue experienced by your company during 2015?

This year, 29% of respondents versus 36% in 2014 realized an increase in revenue of more than 5%. The majority of respondents (34%) experienced a one to five percent growth in revenue. Far fewerrespondents (16% this year versus 22% in 2014) reported actual 2015 revenue to be less than the prior year.

What is the actual revenue growth experienced by your company during 2015?

31%

18%

19%

21%

21% 16% 34% 17%

22% 21% 21% 5% 5%

2%3%

3%

18% 25% 18% 10%

1%

1%

5%

6%

36% 31%

1%

10%

21% 22% 11% 6%5%

4%

2%

3%

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

2016

{

{

{

38%

22%

32%

28%

24%

26% 13% 30% 16%

13% 35% 17% 5%

6% 4%

3%

4%

1%

1%

2%

12% 37% 12% 5% 4%

18% 38% 9%

33% 29% 6% 5%

22% 24%

3% 3%

3%

3%

2%

1%

8%

{1%

"We will have to work longer...to make up for loss in revenue."


I 7 I

■ Decrease

■ 0-4%

■ 5-9%

■ 10-14%

■ Greater than 15%

■ Higher

■ Lower

■ No Change

Fewer respondents are decreasing prices year over year. This year, only 10%of respondents decreased prices versus 15% in 2014. Price increases above4% were realized by 16% of respondents in 2015 versus 14% in 2014.

During the past 12 months, what was the average priceincrease (or decrease) of your products or services?

PRICES AND PROFITS

Increasing from last year, 55% of the respondents (versus 47%in 2014) projected 2015 net income to be higher. Fewer respon-dents (24% this year versus 30% last year) projected their net in-come to be lower in 2015.

How does your projectednet income for 2015 compare to your actual net income for 2014?

14%

64%58%

8%

1%

15%

71% 74%

13% 10% 11%4%

1%1%

16%

60%

13%11%

2%

14%

33%

5%1%

2011 2012 2013 2014 2015

2012 2013 2014 2015

27%

46%

27%

45%

28% 27%

47%

30%

23%

55%

24%21%

". . .price increase in serviceswhich will decrease profits."


I 8 I

EMPLOYMENT OUTLOOK

■ Increased ■ Decreased ■ No Change

Respondents indicated that 34% experienced an increase in headcount for 2015. Respondents who saw a decline inheadcount were slightly lower this year (23% versus 24% in 2014).

What changes to headcount did you make in 2015?

2011 2012 2013 2014 2015

27%

45%

28% 28%

36%

33%

21%

46%

37%

24%

39%

34%

23%

43%

{

". . .a reduction in staffing and services."


I 9 I

■ Increase ■ Decrease ■ No Change

■ Yes ■ No

There appears to be a slight increase in theamount of employees who are seeking andfinding employment elsewhere. While thelarge majority of respondents (80%) did notexperience a substantial turnover in theirworkforce in 2015, a slightly higher number(20% in 2015 versus 16% in 2014) experiencedsubstantial employee turnover.

Have you seen a substantialchange in your employeeturnover in 2015?

Looking forward to 2016, a greater number of firms (46% in 2016 versus 34% in 2015) are planning to hireadditional employees. More than half of our respondents (52%) plan to keep their workforce number steady,while only 2% anticipate having to decrease headcount.

What are your plans for headcount in 2016?

The majority of respondents (61%) are finding qualified candidates to fillvacant job openings. However, of those that are having a problem fillingopen positions, Middle Management (14%) and Laborers (11%) are thejob vacancies that employers are finding hardest to fill.

Do you have job openings that are hard to fill?

84%

80%

20%

16%

24%20%

56%

29%

15%

56%

31%

6%

63%

34%

8%

58%

46%

2%

52%

2012 2013 2014 2015 2016

2014

2015

■ No

■ Executive

■ Middle Management

■ Administrative

■ Laborer

61%14%

9%11%

5%

"We must be doingsomething right"

"We hire mostly professionals."


I 10 I

ANNUAL RAISES

This year, there was a slight increase to 86% (versus 85% a year ago) in annualraises in the zero to four percent range. Respondents with employees whoreceived raises above five percent decreased slightly to 8% versus 11% a yearago. It is interesting to note that more respondents (6% in 2015 versus 4% in2014) found it necessary to decrease salaries.

Over one-third of respondents (36%) feelthey will experience some impact to theirbusiness if the minimum wage is increasedto $15.00.

During the past 12 months, what was the average annual raise granted to your employees?

Will an increase in the minimumwage from $8.75 to $15.00 havean impact on your business?

■ Decreased Salaries

■ 0-4%

■ 5-9%

■ 10-14%

■ Greater Than 15%

■ Major Impact

■ Some Impact

■ No Impact

2011 2012 2013 2014 2015

88%

10%

2%

91%

2% 5%2%

7%

83%

8% 4% 6% 6%

85% 86%

9%1%{ 1%{1%{

14%

64% 22%

"I would really think hard on the future of staying in business."

"We will have to moveour business from NY."


THE FUTURE

I 11 I

RELOCATION

Over half of all respondents (53%) do nothave a succession plan for their business. Ofthose that do have a plan, 20% intend to gifttheir business to the next generation. Manyrespondents (12%) have other forms of suc-cession in place (e.g. succession by youngeremployees, ESOP).

Does your company have asuccession plan?

The respondents apparently find value in having their businesses locatedon Long Island. The results show an overwhelming 99% will either stayin their current location or move to another facility on Long Island.

Are you planning to relocate any operations in 2016?■ No

■ Yes, to another area of LI

■ Off LI

2011 2012 2013 2014 2015

89%

6% 6%5%

96%

1% 3%

95%

4% 1% 1%

94% 93%

4% 2%

53%

20%

7%

3%

5%

12%

■ No

■ Gifting to next generation

■ Strategic alliance with a customer, competitor, or vendor

■ Sale

■ Merger

■ Other

"Putting one in place now."

"Transfer ownership to next generation."


I 12 I

GROWTH INDUSTRIES

For the second year in a row, Health Care is in the number one spot with 43% ofrespondents anticipating this to be the industry with the greatest potential forgrowth. Technology remains in the second position, as reported by 34% of therespondents.

Which industry do you feel has the greatest potentialfor growth on Long Island?

■ Tourism

■ Technology

■ Retail

■ Services

■ Health Care

■ Manufacturing

■ Other

2011

2012

2013

2014

2015

15%

18%

5%

7% 28% 8% 47% 5%

2%3%

4% 34% 11% 43% 4%

2%2%

39% 16% 33% 4%

3%

37% 19% 17% 6%

3%

35% 6% 16% 22% 6%

"We need more people. . .to access educationand training programs to build the workforce."


ECONOMIC INDICATORS

It appears the fluctuations in the stock market are having an impact on how weview its performance over the coming year. Almost half of all respondents(47%) believe there will be no change versus 24% in 2014. Only 15% (versus46% in 2014) believe it will go up, with 38% being much less optimisticresponding that we will see a decline in the stock market.

Where do you think the S&P 500 index will go over thecoming year?■ No Change

■ Up

■ Down

An overwhelming majority of respondents (92%)have altered their investment plans due to stockmarket volatility. Adjustments included cashing outon investments, keeping more cash, having a moreconservative investment approach, and being morerisk averse, which are just a few of the ways re-spondents are trying to minimize any losses.

Has the volatility in the stock marketaltered your investment plans?

■ Yes

■ No

I 13 I

2011 2012 2013 2014 2015

32%

27%

41%

35%38%

27% 26%

52%

22%24%

46%

30%

15%

47%

38%

92%

8%

"Curiously, I believe there will be buyingopportunities in blue chip stocks."

"More conservative due to uncertainty.”"Risk aversion."


I 14 I

REAL ESTATE

The majority of respondents still appear to be optimisticabout the residential real estate market. In fact, overhalf (57%) believe that prices will continue to increaseover the coming year. Only 8% of respondents (versus12% in 2014) believe prices will decrease, while 35%believe prices will remain steady.

What do you project will happen to residential real estate prices on Long Island in the coming year?

RETIREMENT

More than two-thirds (68%) of all respondents have had tomake adjustments to their retirement plans due to the on-going impact of the 2008 financial crisis. Many respondentshave had to delay their retirement plans to make up for themoney lost and still have not fully recovered since 2008.

Has the great recession of 2008 alteredyour retirement plans?

■ No Change

■ Up

■ Down

2011 2012 2013 2014 2015

42%

15%

43%46%

37%

17%

29%

63%

8%

35%

53%

12%

35%

57%

8%

■ Yes

■ No

68%

32%

"Need to put more away for future. . .can never retire."

"Retirement? What's that?"


I 15 I

CURRENT EVENTS & ISSUES

An overwhelming majority (96%) believe that the strugglingglobal economies will have some type of impact on theeconomy of the United States.

Do you believe that the struggling globaleconomies (e.g. China, Greece, Brazil) will impact the United States economy?

It appears that the Long Island economy will be affected insome way by immigration reform, as 83% of respondentsbelieve our region will see at least some impact.

What impact will any proposed immigration reform have on the Long Island economy?

While it appears that the overall Long Island economy maysee some impact by immigration reform, respondents (80%)are more confident that their businesses will not be impactedby any legislation.

What impact will any proposed immigration reform have on your business?

The majority of respondents (89%) do not currently claimany research and development tax credits.

Does your company currently claim researchand development tax credits?

■ Major impact

■ Some impact

■ No impact

■ Major impact

■ Some impact

■ No impact

■ Major impact

■ Some impact

■ No impact

■ Yes

■ No

16%

80%

71%

19%

11%

89%

1%

17%

80%

12%

4%

"It's an interconnected world and has toaffect the US economy to some degree."

"More people competingfor low wage jobs."

"My competitors will have the option of hiringcheaper labor. I, unfortunately can't."


--I 16 I

Over three-fourths (76%) of respondentsbelieve that Hillary Clinton will receive theDemocratic nomination for President ofthe United States. (N.B. this questionnairewas developed during the time when “conventional wisdom” believed that JoeBiden would enter the Presidential race).

Who will be the Democratic Presidential candidate?

The top three Republican candidatesfor President according to our respon-dents are Donald Trump (30%), MarcoRubio (21%) and Jeb Bush (19%).

Who will be the Republican Presidential candidate?

Hillary Clinton76%

Joe Biden16%

Bernie Sanders4%

Indifferent4%

Lincoln Chafee0%

Jim Webb0%

Lawrence Lessig0%

Martin O’Malley0%

?Donald Trump

30%Marco Rubio

21%

Jeb Bush19%

Ben Carson10%

Carly Fiorina6%

Chris Christie2%

Too early to predict6%

Ted Cruz4%

?John

Kasich

2%

Jim Gilmore

0%

Lindsey Graham

0%

George Pataki

0%

Rand Paul

0%

Rick Santorum

0%

Mike Huckabee

0%

Bobby Jindal

0%


-I 17 I

Clinton

Trump

Rubio

Carson

Bush

Biden

Fiorina

Christie

Cruz

Huckabee

Kasich

O’Malley

Sanders

47%

47%

23%

23%

7%

6%

5%

4%

2%

1%

1%

1%

1%

1%

1%

Almost half of all respondents (47%) believe that Hillary Clintonwill be the first woman in the White House to be sworn in as the45th President of the United States.

Who will become President in 2016?


I 18 I

JUST FOR FUN

Of the 32 teams in the NFL, over half (19) were rated as possible Super Bowlwinners. Of course, eternally optimistic New York fans (Jets and Giantscombined) make up 32% of our responses. This year, the New EnglandPatriots are the clear favorite with 28% of respondents believing theirwinning record will take them all the way. Hope your team wins!

Which team do you predict will win Super Bowl 50?

28% 18% 17% 15% 7% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% <1% <1%

Don’tknow/care


I 19 I

None other than The Piano Man himself, hometown native Billy Joel, is theoverwhelming favorite (82% of respondents) to open the “new” Nassau Coliseumat the end of 2016. Paul McCartney and Elton John each recieved 4% of re-spondents' votes. The New York Islanders, JayZ and Beyoncé, Phil Collins andSting, Quest, Phish, The Foo Fighters, and Paul, Ringo, George's son Dhani,and John's sons, Sean and Julian received the remaining 10% of the votes.

Who should be the first person/group to perform at Nassau Coliseum when it reopens in December of 2016?

Billy Joel82%

Paul McCartney4%

Paul, Ringo, George’s son Dhani and John’s sons Sean/Julian

Elton John4%

New York Islanders

Quest Foo FightersPhish

Jay Z & Beyoncé Sting &Phil Collins

Rem

ain

ing

10%


Editor

Annette EspositoMarketing DirectorAVZ

Page Layout & Design

Mike AlbanoCreative Director

Writers

Annette EspositoMarketing DirectorAVZ

Thomas J. Murray, CPAManaging PartnerAVZ

Photography

Jim LennonPhotographerJim Lennon Photography, Inc.

Printer

Official Offset Corp.

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