Optimism About Business Climate On the Decline, According to Pennsylvania Chamber of Business and Industry

Harrisburg, Pennsylvania, UNITED STATES

HARRISBURG, Pa., Sept. 10, 2007 (PRIME NEWSWIRE) -- Optimism about the Commonwealth's business climate is trending downward, according to the results of the Pennsylvania Chamber of Business and Industry's 17th annual Economic Survey. The results of the survey, which was conducted by Susquehanna Polling and Research, were presented today at a Capitol news conference.

The survey gauged the opinion of businesses from across the Commonwealth, including companies of all sizes and from all industry sectors, on the business climate and outlook for the future, as well as on the issues that have the greatest impact on job creation.

"A number of indicators are pointing to a downturn in the economy at both the national and state levels," said Kirk Liddell, president and CEO of Irex Corporation and chairman of the PA Chamber's Board of Directors. "However, more than just stagnant sales and growth trends, and limited investments in technology are fueling businesses' dim view of the Commonwealth's business climate."

Liddell said rising health-care costs, business taxes and renewed concern about lawsuit abuse, in addition to trepidation about state government's proposed solutions to these and other business-related issues, have put Pennsylvania employers in a more pessimistic mindset than in 2006.

According to the survey, a majority of respondents believe the state is on the wrong track, with an overwhelming majority (60 percent) rating the business climate as "fair" or worse. As was the case in 2006, almost one-third of employers still say they would consider leaving the state if they could.

Health-care costs were considered a major deterrent to business growth and job creation by 80 percent of employers polled, and the need to control health-care costs was ranked the No. 1 priority by companies of almost all sizes, which shows how deep-seated the concern over health care has become.

Nonetheless, by a 60 percent to 32 percent margin, employers in the survey oppose the governor's health-care reform plan, which includes a health-care payroll tax that would be assessed on all companies to subsidize the cost of insurance for uninsured Pennsylvanians.

"Everyone -- businesses and residents alike -- recognizes that our health-care delivery system is in a state of crisis," said Gene Barr, PA Chamber vice president of Government and Public Affairs, who noted that opposition to the reform plan comes from businesses of all sizes. "Elected officials must look for solutions that don't further damage an already broken system."

Barr commended the governor and state lawmakers for addressing the issue, but said the health-care payroll tax proposal is seriously flawed and that too much emphasis is being placed on determining who pays the bill rather than on how to reduce that bill.

The survey also showed a significant lack of support (64 percent to 26 percent) for the Rendell administration's proposal to create an $850 million alternative energy fund, which would provide more incentives for alternative energy companies that have already been guaranteed a market through 2004's Alternative Energy Portfolio Standards Act. The program would be partially funded by a new electricity tax on industrial, commercial and residential users. Nearly half of survey respondents believe the program will have a negative impact on the state's business climate.

Liddell said employers who responded to the Economic Survey did provide elected officials guidance on how to improve the Commonwealth's business climate.

According to the survey, 69 percent of respondents said the most effective role that state government can play to foster a better business climate is to reduce the cost of doing business by cutting business taxes, regulations and health-care costs; and reforming unemployment compensation, workers' compensation and the legal system. In fact, 85 percent of those polled said business could thrive without extra economic incentives if positive steps were taken to lower the overall costs of doing business in the Commonwealth.

"The survey results support Pennsylvania Chamber members' position that economic development initiatives, such as state financial incentives, should complement a sound business climate, not supplant it," Liddell stressed.

Full results of the 17th annual Economic Survey can be found online at www.pachamber.org.

The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, serving more than 24,000 members and customers statewide. More information is available on the PA Chamber's website at www.pachamber.org.

The Pennsylvania Chamber of Business and Industry logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=402


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