Summary of Results: 23rd Annual Pennsylvania Economic Survey, on behalf of the PA Chamber of Business & Industry and Elizabethtown College
SP&R was proud to play a role in the 23rd annual Economic Survey for the Pennsylvania Chamber of Business and Industry and the S. Dale High Center for Family Business at Elizabethtown College this year. In a press conference held on September 25, 2013 revealing the results of this year’s poll held at the state Capitol, SP&R president, Jim Lee, gave a summary of the methodology and findings. Conducted with Pennsylvania employers, this year’s poll showed that while there is positive growth in business, employers still have a ways to go.
Read Jim Lee’s remarks from the press conference below:
This year’s annual survey was conducted August 6th through August 23rd with 650 employers across Pennsylvania. This includes telephone interviews with 350 Chamber members and 300 additional interviews with non-members as part of a separate random, representative sample of the broad employer community across the Commonwealth. Interviews are carefully monitored to ensure a representative sample of the business community is achieved by company size as measured by number of employees, by type of industry, as well as a proportionate distribution of surveys based on geographic location in the Commonwealth. The margin of error for a sample size of 650 interviews is +/-3.8% at the 95% confidence level, or approximately +/-5% when referencing the findings of subgroups of respondents like interviews specifically with Chamber members or non-members.
This year’s CEO-survey with Pennsylvania employers shows some positive indications from job creators, but still a long way to go to get back to the kinds of figures we saw in surveys conducted prior to the latest recession. For instance, nearly one in four employers (or 24%) believes the business climate in the Keystone State has gotten better in the past 12 months, up slightly from 20% last year. This represents the highest level reported in more than six years since before the 2008-‘09 recession began. Conversely, the percent of employers who say the economy has gotten worse is down from 32% last year to 22% in the current survey. This represents a huge drop from the peak of the recession in 2009 when 67% of employers said the economy was worse off.
This year’s survey also shows some bright spots in terms of sales growth both in the past 12 months and future projections as well. For instance, more than one third of employers, or 35%, report that their sales increased in the last twelve months. Although this might not seem like a lot, it is technically the highest percentage of employers reporting increases in five years. Moreover, 38% of CEO’s anticipate their sales will increase in the next 12 months, which is a slight gain from last year and also a new five-year high. These higher levels of optimism are consistent with national employer studies showing small business confidence, as measured by a confidence index, also reaching new peaks not seen since prior to the recession.
However, despite the slightly higher levels of optimism in sales growth, most employers do not report robust hiring or increases in their workforces in the last 12 months, nor do many employers expect things to change much in the next 12 months. For instance, only one in five or 20% report increases in hiring the last 12 months, virtually unchanged from 21% last year. These figures are still below the high water mark set in 2006 when more than four in ten employers reported hiring more workers. Moreover, only one in five employers say they expect to hire more workers in the next 12 months. This is a modest gain from 17% last year, but still far below a 4-year average of one in three employers who reported hiring more staff from 2004 to 2007 prior to the start of the recession.
Employer reports of investments in new technology, equipment or machinery also continues to be far below pre-recession levels. In the current survey, fewer than one in four employers report making “major” investments in technology or machinery the last 12 months, virtually unchanged from last year’s survey. And only slightly more than one in ten employers, or 13% expect to make major investments in their companies in technology or new equipment in the next 12 months, while only an additional 30% expect to make at least some type of “minor” investments. To better understand how far these figures are off from pre-recession levels, this means that while a combined 43% expect to make some kind of investments, this leaves more than fifty percent of employers who expect to make absolutely no investments in technology or equipment over the next 12 months. In comparison, in years prior to the start of the economic slowdown it was not uncommon for close to 90% of employers to say they planned to make at least some kind of investments in their companies, a figure that has plummeted by more than 300% in a span of less than ten years.
In conclusion, this year’s survey shows some positive signs that employers are moving the needle in making modest gains in sales growth, and even future projections in sales for the upcoming 12-month cycle. But it seems even these modest gains in sales growth haven’t given CEO’s the confidence they perhaps need to hire more workers, or make firm commitments to hire more in the future, or make even modest capital improvements in their companies.