SMALL BUSINESS : Firms Expect Brighter Future Yet Consider Relocation, Poll Says

Orange County businesses seem to have mixed feelings about where their future lies.

In a recent poll, two-thirds of the companies surveyed said they expect to see an increase in profits next year. Yet nearly one-third said they are considering relocation out of California.

Chicago-based accounting firm Arthur Andersen & Co. conducted the national survey, which included 87 small to mid-size companies in Orange County.

Thirty-nine percent of the companies here predicted a jump in earnings of 10% or more--contributing to the most optimistic outlook of all the Southern California counties tallied. Another 24% foresaw some kind of increase in earnings over the next 12 months. Nationally, only 21% of the companies expected an increase greater than 10%.

But that didn’t stop businesses here from dreaming of an escape from California. Twenty-eight percent of the companies surveyed in Orange County said they were contemplating a relocation--the most in any Southern California county surveyed. In Los Angeles County, for instance, only 17% of companies polled had moving on their minds.

Why the apparent conflict?

The cost of housing is higher here than in Los Angeles County, creating a problem for manufacturing companies that hire mostly low- to mid-income employees, said Don Dahl, a partner in the accounting firm’s Enterprise Group, based in Irvine.

“I don’t think people really want to leave Orange County--they’re just looking hard at it,” he said. “A lot of our clients consider moving, but most end up deciding to stay here.”