Lexington, KY - Recent proposals by Lexington-Fayette Urban County Government regarding two-way city streets and public funding for a Rupp Arena Entertainment District have 40 local business owners and leaders torn, according to the most recent Business Confidence Index (BCI) poll of members of the Lexington business community.
But on one important issue, those same people speak with one voice: Over the last six months, they've become much more optimistic about Lexington's economy.
Respondents on the BCI panel were asked to rate their level of confidence in the economies of the United States, Kentucky, Lexington and their own businesses, using a one-to-five scale, where five was considered "very optimistic" and one was considered "not optimistic at all."
Lexington's upward move in confidence was most striking. The city's average confidence score of 3.75 represents an increase of .27 points from the 3.48 mark it received six months ago. That rating also represents Lexington's highest average measure since 2006 (3.78).
Business owners' surge in confidence was evidenced in another manner. Thirty percent of all respondents said they plan to expand their local operations to at least some degree in the next six months, an increase of 10 percentage points since July.
Though the gains weren't as large, increased confidence reached beyond the municipal level. Faith in Kentucky's economy continued its steady move upward, rising by .10 points in the last six months. The state's average score of 3.33 continued its rise from the January 2010 mark of 2.78 - an increase of .55 points in two years' time. And, local business owners' confidence in the economic state of their own organizations stands at 3.90, a figure .07 points higher than it enjoyed in July 2011 and only a tenth of a point behind its highest average mark of 4.00 in 2007.
Meanwhile, confidence in the United States' economy attained its lowest BCI score since 2010, dropping .05 points since last July to an average rating of 2.85.
Local business leaders and owners also were asked their opinions on two currently proposed issues; on both, their feelings were decidedly mixed. Half of all respondents said they favor a proposal to change Lexington's main downtown roads from one-way to two-way streets in order to improve overall traffic flow, while 48 percent said they disapproved of the idea. Opinions were only slightly more positive on taxpayer funding for the proposed Rupp Arena Entertainment District, with approval by business owners winning by a 53-48 margin.
(The Rupp Arena Entertainment District would include a renovated Rupp Arena, the Lexington Center, and 46 acres surrounding the Lexington Center complex.)
Despite increased optimism at the local and state level, when asked what they considered the most pressing economic issue facing Lexington, business leaders most often cited jobs and unemployment (43 percent), followed distantly by matters concerning local, state and national budgets (10 percent).
One business owner expressed great frustration with the plight of Lexington's unemployed and underemployed.
"We've got people in their 50s and 60s who have worked in a business all their lives who are looking for jobs, greater than I've ever seen," the owner said. "Then I've seen other people who just have necessities who are looking to take on second jobs or expand their income. We're hiring right now, and we try to spend our dollars the best we can to help the community. But as a small business, there's only so much we can do."
Another panel member said that consumers' reluctance to spend represents a bigger problem than the job market. "We have very low unemployment here, but people are a little skittish when it comes to spending. They're not as willing to spend their money as they once had been. So I think consumer confidence isn't where it should be yet."
The Business Confidence Index is conducted biannually by Preston-Osborne through telephone interviews with a panel of business leaders. Panelists were selected at random from among Commerce Lexington members.
J.C. Dumas is project manager at Preston-Osborne.