by L. Henry | October 24, 2022

Inflation and rising costs top the list of challenges facing Pennsylvania’s business owners and top line executives as supply chain disruptions along with difficulty in finding and keeping qualified employees drive rising concerns over future economic conditions.

Results of the Fall 2022 Keystone Business Climate Survey of business owners and top line executives finds the inflationary cycle is likely to continue as 25% plan to increase wages and/or benefits leading to 42% saying they are going to raise the price of the products/services they offer.

Looking back over the past six months 20% of respondents say that in general, business conditions in Pennsylvania have gotten better; 35% say conditions have gotten worse and 42% rated conditions about the same. However, “about the same” is not good as the survey has found a generally negative view of the state’s business climate since on the onset of the COVID-19 pandemic in the Spring of 2020.

Most predict business conditions will remain about the same or get worse over the coming six months: 40% say conditions will remain about the same; 35% expect business conditions to get worse; 23% expect the business climate to improve headed into 2023.

When asked what the top challenge is facing their business inflation/rising costs were cited by 45% of respondents. Thirty-nine percent are concerned over current economic conditions with 33% concerned over future economic conditions. Next 32% are having difficulty locating qualified employees and 31% are having difficulty keeping qualified employees. Taxes follow in the list of challenges with 28% citing state taxes as a problem and 23% concerned over federal taxes.  Government regulations along with supply chain disruptions are also a concern of 23% of respondents.

The business owners/executives participating in the Fall 2022 Keystone Business Climate Survey were asked what they think is the biggest cause of the continued high rate of inflation. Twenty-Seven percent blamed government overspending; 20% cited the continued effects of the COVID-19 pandemic; 14% blamed the Russian invasion of Ukraine; 13% tagged corporate greed; 10% blamed government energy policies, and 8% cited an increase in the money supply.

Inflationary pressures are not likely to lessen in the near future as 42% of the businesses say they are planning to increase prices and 25% are planning to increase wages and/or benefits. Nineteen percent say they are expecting to adjust operating hours. Seventeen percent are going to postpone hiring; 16% plan to add new jobs; 13% are expecting layoffs. Sixteen percent plan to add new products or services with 13% expecting to decrease their product/service offerings.

In an effort to bring down the rate of inflation the Federal Reserve has been increasing target interest rates. Higher interest rates have caused 28% of the businesses surveyed to postpone building/equipment projects while an additional 18% have cancelled building/equipment projects. Twenty-seven percent say they have opted not to cancel any capital improvement projects, 29% had no such projects planned.

Finding and retaining qualified employees remains a major problem. Forty-eight percent of the survey participants report having open positions they are looking to fill. Sixty-four percent are having difficulty filling those positions – 30% are having significant difficulty. Twenty-seven percent reported no difficulty in filling open positions.

Supply chain disruptions have increased at 34% of the businesses and such disruptions remain about the same at 29%. Seventeen percent reported a decrease in supply chain disruptions. Another 14% reporting they have not experienced any supply chain disruptions.


State Issues

The Pennsylvania legislature recently passed, and Governor Tom Wolf signed into law a reduction in the Pennsylvania Corporate Net Income tax (CNI) from 9.99% to 8.99% with the goal of reducing the rate to 4.99% by 2031. Forty-eight percent of those responding to the Fall 2022 Keystone Business Climate Survey said the pace of that reductions was about right, 27% said it is too slow, and 15% thought the rate of reduction was too fast.

When asked if considering the 1% cut in the Corporate Net Income Tax (CNI) rate and planned additional rate cuts they would be more or less likely to expand their business in Pennsylvania, 19% said they are now more likely to expand with 15% saying they are less likely to expand. Fifty-eight percent said their expansion plans remain unchanged.

The Regional Greenhouse Gas Initiative (RGGI) continues to be a major issue that will impact consumer electric rates. Fifty-one percent of the business owners/executives say that if court rulings return to the issue to the state legislature lawmakers should act to end Pennsylvania’s entry into the multi-state compact; 30% say they should not. When told RGGI would increase average electric bills by over 30% the number wanting the legislature to end participating in the compact increased to 58%.

Seventy-five percent of participants in the survey say they are concerned about the upcoming November General Election being conducted fairly, and that the vote count will be accurate. Of that number 39% say they are very concerned about the integrity of the upcoming election. Twenty percent indicated that they are not at all concerned about the election count.


Employment and Sales

Overall employment levels at businesses participating in the Fall 2022 Keystone Business Climate Survey were down slightly over the past six months. Twenty-five percent report having a lower employment level; 17% increased their number of employees. Employment was steady at 51%. Looking ahead six months, 22% expect to increase their employee compliment with 21% expecting to have fewer employees. Fifty-two percent expect employment levels to remain unchanged.

Over the past six months sales were down at 32% of the businesses and increased at 23%. Sales remained about the same at 37%. Looking ahead six months, 28% forecast rising sales with 26% expecting sales to decrease. Thirty-seven percent expect sales to remain about the same.


Job Approval Ratings

President Joe Biden’s job approval rating remains under water in the survey with 41% holding a positive view of his performance in office and 49% a negative view. Pennsylvania’s two U.S. Senators also remain in negative territory with U.S. Senator Robert P. Casey, Jr. posting a 32% positive/40% negative rating and U.S. Senator Patrick Toomey 29% positive/44% negative rating.

Economic conditions have resulted in negative job reviews for the nation’s top fiscal officials: Federal Reserve Chairman Jerome Powell received a 23% positive/47% negative job approval rating with U.S. Treasury Secretary Janet Yellen receiving a 29% positive/41% negative rating.

At the state level, outgoing Governor Tom Wolf’s job approval rating continued to improve as the COVID-19 pandemic recedes: He received a 43% positive/41% negative rating. Attorney General Josh Shapiro posted a 41% positive/34% negative rating with 25% undecided. Auditor General Timothy Defoor received an 18% positive/33% negative/50% no opinion rating. State Treasurer Stacy Garrity garnered an 18% positive/32% negative rating with 50% undecided.

The business owners/executives continue to have a negative view of the legislative and judicial branches of government. The United States Senate received a 33% positive/54% negative job approval rating with the U.S. House of Representatives receiving a 27% positive/54% negative review. Likewise, the Supreme Court of the United States was under water with a 30% positive/56% negative rating.

At the state level, the Pennsylvania Senate posted a 33% positive/43% negative rating, and the Pennsylvania House of Representatives received a 34% positive/43% negative review. The Pennsylvania Supreme Court also was in negative territory with a 27% positive/47% negative rating.



Participants in the Fall 2022 Keystone Business Climate Survey consisted of 52% being owners of the business; 20% being the CEO/COO/CFO; 10% a local manager; and 9% a state manager. Nineteen percent of the businesses responding are based in Northwest Pennsylvania; 18% in Northeastern Pennsylvania; 18% in Southwest Pennsylvania. Fourteen percent are located in Southeastern Pennsylvania; 12% Northcentral Pennsylvania; 11% Southcentral Pennsylvania; 5% in the Lehigh Valley and 5% in the Johnstown/Altoona region.

The Survey was conducted electronically from October 7, 2022 through October 21, 2022 with a total of 212 businesses responding.

Complete numeric results are available at and