With no clear end in sight to the region’s unfriendly business climate, LA County business owners and executives are less optimistic about the economy this year, but they are working to adapt to long-term stagnation in employment and growth, according to a new survey by the Los Angeles County Business Federation (BizFed).

The latest BizFed annual BizPOLL survey of members finds that only 52% believe business conditions this year will be better than last – down nine points from last year’s poll. When it comes to hiring new workers, the survey found that just 30% plan to grow their workforce this year – down from 34% who felt that way the same time last year. While, 48% said they plan to invest in durable goods this year, compared to 33% who said that last year, 92% say that it’s too difficult to access capital to make those investments.

The results come as – for the third year in a row – taxes and fees and government regulation top the BizFed survey as members’ highest-priority concerns. Open-ended comments on the survey included numerous concerns about the slow and confusing bureaucracy businesses – including small “mom and pop” businesses – must navigate to receive permits, pay fees, and ensure compliance with seemingly ever-changing local rules and regulations.

After reviewing the survey, David Fleming, BizFed Founding Chair said, “Businesses in Los Angeles are treading water, and instead of throwing them a lifeline, government officials have continued to weigh them down with taxes, fees, and regulations. Businesses are telling us there are very few plans to hire, and very few plans to fire. Instead, they’re trying to make capital investments to help sustain their revenue without adding new payroll costs. Add to that their anxiety over how health care reform is going to hit them, and this is no recipe for recovery.

Added LaDonna DiCamillo, BizFed Chair and President-elect of the Long Beach Area Chamber of Commerce, “Businesses are adapting to long-term stagnation. They’re telling us that they’re trying to squeeze new investments out of existing revenue because it’s still too difficult for them to access new capital.”

Notable among the results is the general perception that LA County is unfriendly to business. Sixty percent of survey respondents identified the City of Los Angeles as the “least business friendly city” in the region. However, El Segundo, Long Beach, Burbank, and Glendale were most frequently cited among the “most business friendly.” Despite 76% of businesses surveyed being anchored in LA County, 80% say they have no plans to expand or grow in the county, and 9% actually plan to leave the county. High taxes and excessive regulations were the most common reasons cited for businesses either not expanding in or planning to leave LA County.

This survey should be a wakeup call. Sacramento and Washington have been touting a series of positive economic indicators, from revenue increases to unemployment moving in the right direction. But the reality on the ground for thousands of businesses throughout Southern California is very different.


The BizFed Survey Found:

Top 5 Priority Issues: No. 1: No. 2: No. 3: No. 4: No. 5:

Taxes and Fees
, Government Regulations/Compliance, Health Care
, Education
, Legislative Gridlock (State and/or Federal)


Employment and growth are stagnant

30% plan to hire this year, compared to 34% last year
. 16% plan layoffs this year, the same as 16% last year. 
48% plan to invest in durable goods this year, compared to 33% last year. But 92% perceive access to capital as still a challenge.

Businesses that call LA County “home” are treading water for yet another year

76% are anchored to the region
. 80% have no plans to expand in LA County. 9% are planning to leave LA County.

2011, 2012, 2013: “taxes & fees” ranked 1 and “regulations” ranked 2 among concerns:

“Length of time to get permits”, “Bloated bureaucracy/red tape”, and “High taxes”

“Health Care” identified as a Top 5 issue, driven by concern/uncertainty over health care reform