Turnaround:

PA business leaders report
state's economy improving

For the first time since September of 2000 more Pennsylvania employers say the state's business climate is improving than think it is getting worse. The Lincoln Institute's Fall 2004 Keystone Business Climate Survey found 28% of the business leaders surveyed say the economy has improved over the past six months, while 21% felt it had deteriorated. Another 49% felt business conditions were about the same as they were six months ago.

The period between March of 1996 and September of 2000 consistently found employers reporting improving business conditions in the commonwealth. However, the March 2001survey - reflecting the recession that began during the waning months of the Clinton Administration - found employers turning pessimistic with 32% saying business conditions had gotten worse in the preceding six months and only 21% reporting better business conditions. That negative trend persisted through last Spring's survey when 34% said business conditions had worsened while just 23% felt conditions had improved.

Results of the current survey are consistent with national economic statistics. Those numbers show the U.S. economy emerging from a period of sluggish economic growth greatly affected by the terrorist attack on the World Trade Center . Pennsylvania employers not only report improving economic conditions over the past six months, but are optimistic that more progress will be made in the upcoming six month period. Thirty-six percent say they expect business conditions to improve over the winter months, while 18% forecast worsening state economy. Forty-one percent say conditions will remain about the same.

Job growth has been the lagging component of the current economic recovery. However, the current Keystone Business Climate Survey finds improvement in that area as well. Twenty-two percent say employment levels at their company are higher than they were six months ago, compared to 15% who say employment is down. The March 2004 survey found employment levels up at just 18% of firms, but lower at 17% -- painting a stagnant jobs picture at that time.

Looking ahead six months employers are optimistic that job growth will continue. Twenty-eight percent say they plan to add to their employee compliments over the coming six months, while just 7% forecast employing fewer workers.

On the sales front, a robust 43% say sales have increased during the previous six months, while 24% say sales have lagged. Looking ahead six months, 44% forecast increased sales, while 11% expect sales to drop. That confidence level is slightly lower than reported in the March 2004 survey, when 53% forecast rising sales and 7% thought their sales would drop.

Pennsylvania companies are largely retaining their facilities in the Keystone State . Eighty-nine percent said they did not consider moving any of their jobs or operations out of the commonwealth over the past six months. Three percent did move some operations out of state, while another 8% considered moving operations. None of the companies surveyed said they considered moving operations into Pennsylvania.

Job Performance

Pennsylvania 's employers continue to give President George W. Bush a high job approval rating. Seventy-nine percent in the current Keystone Business Climate Survey say the have a positive view of the President's job performance, while 16% disapprove. That number is virtually unchanged from last spring when 80% held a positive opinion of President Bush compared to a 16% negative rating.

Federal Reserve Board Chairman Alan Greenspan's job performance rating, while strongly positive, continues to slide. Sixty-nine percent give the fed head a positive rating. That's down from 73% last spring and 78% a year ago. He receives a 7% negative rating in the current survey.

Although still viewed unfavorably, U.S. Senator Arlen Specter's job performance rating has improved somewhat since last spring. Thirty-one percent of the employers surveyed give him a positive rating, while 43% hold a negative view of the state's senior senator. Last spring just 25% gave Senator Specter a positive rating and 51% held a negative view. Meanwhile, 69% gave Senator Rick Santorum a positive job performance rating, while 13% hold a negative view.

Governor Ed Rendell continues to be the least popular statewide elected official among members of the business community. Although his positive rating has improved over the past six months, only 17% of the survey respondents gave him a positive job performance rating while 69% hold a negative view of the governor. Last spring, just 10% held a positive view of his job performance compared to 78% with a negative opinion.

Among legislative chambers only the United States House of Representatives received a favorable job performance rating in the Fall 2004 Keystone Business Climate Survey, and that only a plurality. Forty-six percent said the House is doing a good job, while 34% hold a negative view. An outright majority (52%) hold a negative opinion of the job performance of the U.S. Senate, while 27% say the senate is doing a good job. Thirty-nine percent have a negative view of the Pennsylvania Senate, compared to 31% who feel the state senate is performing well. Thirty-seven percent feel the Pennsylvania House of Representatives is falling short, with 34% thinking the state house is doing a good job.

Heroes, and Role Models

The Fall 2004 Keystone Business Climate Survey also included a wide range of questions posed to the state's business leaders on leadership qualities, and the personal characteristics they look for in selecting their heroes and role models. Results of those questions can be obtained on-line at www.lincolninstitute.org.

Methodology

The Lincoln Institute of Public Opinion Research conducted the Fall 2004 Keystone Business Climate Survey on-line, receiving completed survey forms from 156 business leaders from across the Commonwealth of Pennsylvania between October 4, 2004 and October 12, 2004 . Complete numeric results of the current survey, as well as archival results from past polls can be viewed at www.lincolninstitute.org.