In the Lincoln Institute’s Spring 2012 Keystone Business Climate Survey, executives/managers were asked about the current business conditions facing firms in the Commonwealth. They were also asked to compare the current climate to six months ago as well as about their expectations for the next six months. Survey responses reveal a distinct lack of enthusiasm about the current state of the economy or the prospects for the near future.
In the Lincoln Institute’s Spring 2012 Keystone Business Climate Survey, 309 business executives/managers were asked several questions about the current business conditions facing firms in the Commonwealth. They were asked to compare the current climate to six months ago as well as about their feelings about the next six months. The results show that these decision makers are not optimistic about the state of the economy or the prospects for the near future.
When asked if business conditions in Pennsylvania had improved over the last six months, or the likelihood of improving in the next six months, a majority of the respondents indicated that they believed nothing had changed (51.4 percent) or is about to change (56.7 percent). Meanwhile less than 20 percent believed things had improved or will improve. This represents a marked contrast from last spring when respondents were more optimistic about the immediate future-38.5 percent saw an improving climate while only 30.8 percent expected it to remain the same.
Overwhelmingly, respondents blamed the national economy for this malaise giving very negative ratings to the Federal government, the President, and the State Legislature. Of course pointing fingers in the direction of public officials is one thing, but there are issues such as reducing government spending and curtailing union power these business executives would like to see addressed by these officials in order to better the business climate and ultimately improve the economy.
Until meaningful reforms in these areas, such as reducing taxation and regulation, occur at all levels of government, the economy will remain sluggish and any optimism that remains will quickly dissipate.
Every year the Washington DC based Tax Foundation releases its State Business Tax Climate ranking report. For the past several years Pennsylvania has done reasonably well according to the Foundation, ranking among the top half of all states. These favorable rankings have been a source of consternation inasmuch as they are inconsistent with the widely held view among Pennsylvania businesses that the tax burden on business is an impediment to growth and expansion. Back in 2006, an Institute report (06-03) called attention to problems with the rankings and in 2009 we noted in an Issue Summary our misgivings about the Tax Foundation ranking scheme.