Fun City Foods employee Bill May works Wednesday at the company's warehouse. Bracing for a busy year, the company last month bought two new trucks, adding to the five it already had. Photo by Samantha Clemens. Click image for enlargement. Click image for enlargement. Click image for enlargement. Products await delivery Wednesday at Fun City Foods' warehouse. Fun City, a company stocking casinos and other businesses with fair food, expects purchasing in 2007 to be 20 percent higher than in 2006. Photo by Samantha Clemens. Click image for enlargement. Click image for enlargement.

Segments of the local economy have faltered in recent months.

Housing sales fell and energy prices rose in 2006, and the Strip hasn't welcomed any major new resorts since Wynn Las Vegas opened in April 2005.

Yet local business executives remain optimistic about opportunities for growth in 2007, a survey conducted by the Las Vegas Review-Journal and research firm MRC Group shows.

Among all survey respondents, 37 percent of business owners and managers said they expect an excellent year for their companies in 2007, and 57 percent said they expect a good year.

Businesses most likely to report an excellent outlook have been in operation for more than seven years. They post gross annual revenue between $100,000 and $900,000, and have more than 100 employees.

Half of all companies in retail, real estate, legal and financial services said they believe 2007 will be an excellent year, while 43 percent of service businesses, which include landscaping, architecture and advertising, said they expect an excellent year. Companies in the building and communications sectors have lower expectations, with 80 percent of construction companies and 83 percent of communications businesses preparing for a good 2007.

Count David Chavez, chief executive officer of the Henderson accounting firm Chavez & Koch, among the survey participants forecasting an excellent year for their businesses.

Chavez predicted that his firm's client base and revenue will grow about 35 percent in 2007 as sustained economic expansion leads to job growth across the Las Vegas Valley.

"A lot of projects are on the table in the city," Chavez said. "Those projects need people who can run them. A lot of those projects also have condominium developments attached to them. There's a lot of new investment coming into this town, and with that investment come the services needed to make businesses work."

Chavez said he began planning for the upcoming uptick about 18 months ago. He cut ties with clients who didn't pay according to their service contracts, and he let go of customers who "didn't have a true growth factor in what they were doing."

"We just wanted to clean things up and get a little more focused on the areas we were good at," Chavez said.

At Fun City Foods, executives foresee a good year.

Lon Ross, owner and president of the Las Vegas concession-supplies business, said improved sales and profits are likely, and the company's customer base will either stabilize or grow. Yet, for Ross, prudence counsels against projecting a major boost in business in 2007.

"It's an emotional thing, saying you're going to have an excellent year," Ross said. "If you have anything short of an excellent year, it's disappointing. We like to be cautious and say we're going to have a good year."

Ross, who's owned Fun City since 2003, said new resort construction doesn't always mean substantially better business. When one casino opens, another often closes -- for example, the shuttering of the Stardust in November helped cancel out the addition of Red Rock Resort in April.

"In the end, we typically do end up seeing net growth, but we don't see exponential growth," Ross said.

Nor does Thomas McManus, president of Environmental Health Services, expect dramatic growth in 2007. McManus, who didn't participate in the Review-Journal's survey, is forecasting a sales increase this year of about 10 percent -- comfortable expansion, but well below the 20 percent to 30 percent annual revenue growth the business enjoyed in the early 2000s.

McManus said several factors have restrained recent sales growth at his company, which monitors and controls mold, asbestos, lead and hazardous waste, among other pollutants. First, fewer insurance companies are reimbursing homeowners for mold damage, so more people are repairing fungal infestations on their own, without the help of consultants.

Plus, the golden era of federal environmental regulation is over: The legislative activism of the 1970s and 1980s, which yielded laws mandating the cleanup of lead, asbestos and other toxins in buildings, has given way to a quieter regulatory period with relatively few new rules covering indoor health hazards.

Business at Environmental Health also surged during the anthrax scare that followed the terrorist attacks of Sept. 11, 2001. Environmental Health handled anthrax testing for court systems across Nevada, but demand for that service dwindled after the scare abated.

Also on the wane in Las Vegas is demand for new homes. But the slowing housing market isn't dampening the prospects for model-home decorator Metrospace Design Group, company owner Susan Heath said.

New-home sales in Las Vegas were down 8.5 percent from 2005 to 2006, numbers from research firm SalesTraq show. Yet Metrospace, which mostly does work for home builder D.R. Horton, had a "phenomenal" 2006, expanding its sales more than 100 percent thanks in part to D.R. Horton's entry into markets in Laughlin and Boise, Idaho, Heath said. Heath isn't counting on much revenue growth in 2007, but she said Metrospace will at least match its 2006 sales volume this year.

"We're busy despite the building slowdown," said Heath, who didn't participate in the Review-Journal questionnaire.

The solid business that most company executives are predicting in 2007 could translate into bigger staffs and added purchasing.

Seventy percent of respondents said they'll hire additional workers in 2007, while 17 percent said they wouldn't boost employee rosters. The remaining 13 percent said they're "taking a wait-and-see" attitude. Among businesses most likely to bring on new workers, 75 percent have been open for at least seven years. Eighty percent of real estate companies, 80 percent of financial-services businesses and 100 percent of law firms surveyed said they'll expand their work forces in 2007.

The median number of staff additions among all respondents was five.

Eighty-eight percent of business they would not pare payrolls, while 3 percent said they would cut back payrolls.

At Chavez & Cook, the work force will go from 15 employees today to 20 staff members by the end of 2007.

The firm will bring on an administrative employee and four accountants, all with a midrange salary of about $65,000 a year.

McManus is adding a position in Environmental Health's laboratory, where analysis is handled. He's looking for a mold expert with a master's degree in mycology; the job will pay anywhere from $50,000 to $75,000 annually. McManus said an additional technical-staff hire could be on tap later in 2007, depending on how much the client base at the 15-employee Environmental Health grows.

Confidence was less strong in the purchasing realm, with 52 percent of survey participants saying they will boost purchases in 2007 and 42 percent of respondents reporting uncertainty over whether they'll buy more goods and services during the year. Seven percent said they'll cut back on purchases in the coming year.

Purchasing at Fun City Foods is already on pace to exceed 2006 levels. By the end of January, the business had bought two new trucks on top of the five it had at the end of December, as well as new computers with Windows Vista operating system. Fun City will also increase its food purchasing in anticipation of its customers' growing needs. Purchasing in 2007 should be 20 percent higher at Fun City Foods than purchasing in 2006.

"We want to be prepared (for new business)," Ross said. "We think Las Vegas is in the sweet spot in terms of growth and the overall tourism and hospitality industry. That's not to say trees grow to the sky, or that there won't be bumps along the way. But within the next several years, there's going to be net growth here one way or the other."

Ross said his company, which specializes in the sale of popcorn, corn dogs, nachos and other quick bites, is thriving amid a marketwide move toward more upscale eating options.

"Las Vegas has been moving away from the $2.99 buffet and toward the $200 (per meal) steak house, but that fast-food mentality in between the gourmet meals has not disappeared," Ross said.

"We're finding that people will have a corn dog as a midday meal, and then go eat at the finest restaurants (for dinner). The two seem to have a common ground. People want both."

At Environmental Health, topping 2006 expenditures will be difficult: The company spent $250,000 to complete the interior of an 8,000-square-foot office building it bought a year ago on Cheyenne Avenue. Purchasing in 2007 will be considerably lower, at about $100,000, but "you don't buy buildings every year," McManus said.

"We continue to modernize our systems, so we're definitely keeping on a significant pace to buy goods and services," he said.

Coming Monday: Business owners discuss obstacles standing between their companies and growth in 2007.