Business Survey Forecasts Growth, Relocation

VAN NUYS —  Nearly 40% of San Fernando Valley business owners who responded to a recent survey plan to expand or relocate--most often to larger facilities, according to findings released Wednesday. And 70% of all respondents said they would like to stay in the Valley.

Given that potential for growth, business and civic leaders now must look carefully at building and space usage throughout the sprawling but mostly built-out region to find ways to accommodate that expansion, according to leaders of the Economic Alliance of the San Fernando Valley, which commissioned the survey.

“One of the things I see is businesses saying, ‘We want to grow, but we don’t know where to grow. We’re breaking down the walls right now,’ ” said Bruce Ackerman, president and chief executive officer of the Van Nuys-based Economic Alliance.

“I’m real pleased to see the optimism about growth and expansion,” he said following a news conference. But he acknowledged that finding room to expand is a critical issue.

“You can’t build any more Warner Centers; the land is just not there. So our use of what we’ve got is going to be a key consideration as we go forward,” he said.

The survey and four other Valley-centric information projects were scheduled to be unveiled to the public today at the Alliance’s Summit 2000 conference in Universal City.

The business survey, released to the media Wednesday, queried nearly 10,000 business owners from Glendale to Calabasas and drew 656 responses or about 7%. The aim of the poll was to assess the issues and concerns of firms that provide “basic jobs” in the region.

As such, it was not done as a random sampling of businesses, but was weighted to get more responses from businesses within specific industries, especially manufacturing, which received 39% of the surveys mailed out.

Health, professional and educational services got 16% of the surveys, and finance, insurance and real estate 12%.

In comparison, less than 1% of the surveys were sent to retailers, even though another report on the Valley economy, issued last year by a Cal State Northridge economic research center, showed that 17% of the private sector jobs in 1998 were in retailing. That’s slightly more than the 15% in manufacturing.

Officials with the Alliance, a key business development organization, acknowledged that the report primarily represents the thoughts of those with large and mid-size companies, although they said 38% of the responses came from firms with fewer than 10 employees.

“We didn’t focus at all on retail or on local services like the dry cleaner,” said Doug Svensson, whose Berkeley-based firm, Applied Development Economics, conducted the survey. “We were trying to focus on companies that provided jobs for heads of households.”

For the business owners who did respond, evidence of a potential Valley growth spurt can be found throughout the survey.

“It was very strongly indicated from firms that there are significant growth opportunities in the Valley,” Svensson said. “Many plan to grow, but their main concern is finding the space and resources that they need for that growth.

“The economy of the San Fernando Valley is very healthy and needs a place to grow.”

Asked about the health of their industry, 42.1% saw expansion ahead, while only 14% believed that their economic sector was in a downturn. Nearly 44% believed that their industry was stable.

On the micro level, more than half of the respondents (52.8%) said they plan to invest in equipment or capital improvements in the next three years. Nearly 70% said they had made such an investment within the past three years.

More than two-thirds of the business owners (71.9%) said their current facility was used to capacity. In addition, 49.9% said their production lines are at capacity.

Svensson and officials with the Alliance see those bursting-at-the-seams responses as an indication that the region’s economy is still on a roll.

“In our view, it’s better to be working from that standpoint and trying to serve the demand than to not have the demand,” Svensson said.