FOR IMMEDIATE RELEASE
CONTACT: Lowman S. Henry
Hitting the Skids:
Keystone Business Climate Survey finds PA economy still slipping
Harrisburg (PA) - Pennsylvania employers reported the lowest
business climate confidence levels in nearly a decade according
to the Lincoln Institute’s Spring 2003 Keystone Business
Climate Survey. Business leaders also gave mixed reviews to
Governor Ed Rendell’s budget and tax shifting proposals.
“Business confidence in Pennsylvania’s
economy continued a year-long slide mirroring national business
trends,” said Lowman S. Henry, Chairman of the Lincoln
Institute. “Companies also reported reduced employment
and slumping sales.” However, Henry said there was some
optimism among employers that a turnaround in the economy
could begin later this year.
Fifty-five percent of the corporate leaders
who participated in the Keystone Business Climate Survey said
business conditions in Pennsylvania are worse than they were
six months ago. This is the first time in the nine-year history
of the semi-annual survey that a majority of businesses have
said business conditions had gotten worse in the preceding
six months. Just 9% said they felt business conditions in
Pennsylvania had improved during the past six months, 36%
felt business conditions had remained about the same over
that time frame.
Looking ahead, the survey found 44% of the
businesses optimistic that the state’s business climate
will improve during the coming six months, while 41% expect
business conditions to remain about the same. Twelve percent
expect business conditions to continue to decline.
Employment levels have remained steady at
49% of the businesses responding to the survey, while 35%
report employing fewer workers than they did six months ago.
Only 14% reported having more employees than they had last
September. Looking ahead six months, 59% forecast having the
same number of employees in their workforce, 22% say they
anticipate hiring more workers, while 17% forecast filling
Sales have also hit the skids. Forty-one
percent of the corporate executives surveyed said they have
suffered from decreased sales over the past six months. Twenty-six
percent said their sales had improved since last September,
while 31% said sales remained about the same. There is considerable
optimism that sales will improve headed into the fall. Forty-seven
percent predict their sales will increase while only 14% expect
declining sales. Thirty-seven percent of the firms project
sales will remain steady.
Job Performance Ratings
President George W. Bush continues to receive
strongly favorable job performance ratings from Pennsylvania’s
business community. Eighty-three percent have a positive opinion
of the President, with 16% reporting a negative view of his
performance in the nation’s highest office, and 2% undecided.
Despite the nation’s economic woes,
the Keystone Business Climate Survey posted a strong positive
job performance rating (76%) for Federal Reserve Board Chairman
Alan Greenspan. His rating was, however, down from 82% last
fall. Ten percent of those participating in the current survey
gave Greenspan a negative rating, while 14% were undecided.
n the Keystone Business Climate Survey’s
first measure of Pennsylvania Governor Ed Rendell’s
job performance the new state chief executive got decidedly
mixed reviews. Thirty-eight percent said they had a positive
view of the governor’s job performance, but 32% said
they had a negative opinion. Since it is still early in his
term, a relatively high 30% offered no opinion.
U.S. Senator Rick Santorum is the most popular
statewide figure surveyed. He received a 63% job approval
rating, with just 16% saying they had a negative view of the
state’s junior senator. Another 20% offered no opinion.
However, his partner, U.S. Senator Arlen Specter received
the lowest job approval rating in the survey with just 31%
holding a positive view of his job performance. Thirty-eight
percent said they had a negative opinion of Senator Specter,
while 31% offered no opinion.
Governor Ed Rendell’s budget proposals,
particularly his plan to raise the Personal Income Tax, drew
a negative reaction from the Pennsylvania businesses executives
who participated in the Spring 2003 Keystone Business Climate
Forty-seven percent disagree with the governor’s
tax and spending package, while 44% said they support the
Rendell plan. That overall negative position was driven by
opposition to the governor’s proposal to raise the Personal
Net Income tax from 2.8% to 3.75%. Seventy percent said they
oppose, with 49% strongly opposing the proposed personal income
tax hike. Twenty-nine percent agree with the plan to raise
The Governor’s plan to shift funding
for local school districts by cutting property taxes and replacing
the revenue with $1.5 billion in additional state subsidies
drew a mixed response. Forty-nine percent said they support
the idea, 44% said they disagree. The remaining 6% held no
Business executives disagreed with Governor
Rendell’s plant to bail the state out of its current
cash shortfall. When asked if they agreed or disagreed with
the governor’s plan to use $700 million from the proposed
increase in the Personal Income Tax, along with money from
the state’s “rainy day fund” to plug the
deficit in the 2003-2004 budget, 57% said they disagreed,
while 37% expressed support for the plan.
Another centerpiece of the governor’s
economic agenda is a proposal to borrow, through bonding,
$1.5 billion and spend the money on an economic stimulus program.
Fifty-eight percent of the corporate chieftains participating
in the Keystone Business Climate Survey said they support
the bonding initiative, while 34% disagreed.