Inflation Ravaging Pennsylvania Businesses

Member Group : Lincoln Institute

Rising inflation has supplanted the difficulty in finding and keeping qualified employees as the top challenge facing Pennsylvania businesses. This against the backdrop of a worsening state economy with concern over future economic conditions quashing near term optimism. Those were the key findings in the Spring 2024 Keystone Business Climate Survey of business owners, CEOs and top line managers conducted by the Lincoln Institute of Public Opinion Research.

The semi-annual survey was conducted in late April and reflected reaction to recently released economic data from the U.S. Commerce Department showing U.S. Gross Domestic Product in the first quarter rose by just 1.6% — below the 2.4% predicted by many analysts. The inflation rate also was higher than expected coming in at 3.4% over the first quarter of 2024. Core inflation (excluding food and fuel) was 3.7%. The Federal Reserve has an inflation target rate of 2%.

As are families at the kitchen table, businesses across Penn’s Woods are also feeling the impact of persistent inflation now approaching 20% over the past four years. Ninety-three percent of the businesses surveyed said inflation is having an impact on their operations – 43% said the impact has been “significant.”

When asked to identify the top challenges facing their business 61% cited inflation/rising costs with concern over current economic conditions coming in second at 44%. Six months ago finding and keeping qualified employees was the top concern, and that problem persists as 38% cited keeping qualified employees and 32% said locating qualified employees is a top concern.

Uncertainty over the future of the Trump era tax cuts federal taxes on business income was cited as a concern by 37% of the respondents. That was followed by 36% who cited concern over future economic conditions; 27% are concerned about state taxes on income; 23% worried about government regulations; and 21% cited supply chain disruptions. The concern over supply chain disruptions had been a top concern in the aftermath of the COVID-19 pandemic but has fallen to the bottom of the list of business concerns.

Business Climate

In general, 36% of respondents to the Spring 2024 Keystone Business Climate Survey say business conditions in Pennsylvania are worse than they were six months ago; 37% say business conditions are about the same; while 26% said business conditions have improved. Keep in mind “the same” is actually not good as six months ago 45% reported business conditions had gotten worse.

Looking ahead six months, 27% expect business conditions to get better, 29% expect conditions to get worse while 39% expect conditions to remain about the same.

Employment levels at Pennsylvania businesses have remained stable. Fifty percent of the respondents said they have the same number of employees as they did six months ago; 22% said they have more employees while 22% report having fewer employees. Looking ahead six months 27% of the businesses expect to employ more people; 14% expect to have fewer employees; 53% expect employment levels to remain about the same.

Likewise sales are remaining constant. Forty-one percent report sales at their businesses have remained about the same over the past six months; 28% reported increasing sales; 28% reported decreasing sales. There is optimism for the coming six months: 33% expects sales at their business to increase; 43% expect sales to remain about the same; 16% forecast a decrease in sales.

State Issues

 As Governor Josh Shapiro proposes radical changes to the energy industry concern is beginning to grow over the future dependability of the energy grid. Thirty-four percent of the business owners/CEOs say they are “not so confident” or “not at all confident” in the future dependability of the grid. For now 62% believe the grid will be able to power Pennsylvania’s energy needs.

Polling in the Presidential race shows illegal immigration has surged to the top of voter concerns. Although Pennsylvania is not a border state 67% of respondents to the Spring 2024 Keystone Business Climate Survey said illegal immigration is having a negative impact here; 28% said the negative impact is significant. Fifteen percent said the impact of illegal immigration is positive.

Several changes to tax and benefit regulations now before the Pennsylvania legislature have revealed a deep divide between large and small businesses. For example, a proposal to establish a “Fair Share Tax” that would increase the PIT (Personal Income Tax) on small businesses from 3.07% to 12% and then redistribute the funds to less fortunate businesses received an overall approval rating of 51%. Support for the proposal came almost exclusively from larger business which are taxed differently.

Likewise legislation that would create a statewide mandatory paid family and medical leave program (paid for by employers) was viewed as having a positive impact by 61% of the respondents. Again, support for the mandate came largely from the larger businesses which already offer such benefits. A proposal to expand federal Family and Medical Leave (FMLA) benefits paid by employers to cover siblings, grandparents and grandchildren also was viewed as having a positive impact by 51% of the respondents – also predominantly from the larger businesses included in the survey sample.

2024 Presidential Election

The 2024 Keystone Business Climate Survey also sought to discern the views of the business community on the overall success of the Donald Trump and Joe Biden presidencies.

We asked: “Do you generally think the years that Joe Biden has been President of the United States have been mostly good years for business in Pennsylvania, mostly bad years for business in Pennsylvania or not really good or bad?”  Forty-five percent said the Biden years have been mostly bad years; 31% said they have been mostly good years; 21% said they have not really been good or bad.

We asked: “Do you generally remember the years that Donald Trump was President of the United States as mostly good years for business in Pennsylvania, mostly bad years for business in Pennsylvania or not really good or bad?” Forty-seven percent said the Trump years were mostly good years; 33% said they remember them as mostly bad years; 17% said they were not really good or bad.

Relative to the upcoming Presidential election we also asked those participating in the survey whether generally speaking they believe that no excuse mail-in voting is safe and free from fraud. Thirty-six percent responded the voting method is subject to fraud; 36% said mail-in voting is safe, but less secure than in person voting; 26% believe it to be safe and free from fraud.

Job Approval Ratings

Across the board job approval ratings in the Spring 2024 Keystone Business Climate Survey were more favorable than in recent past surveys.

For example, President Joe Biden received a 49% positive job approval rating against a 45% negative rating. The positive numbers were driven by the larger businesses responding, the negative number by the smaller businesses.

U.S. Senator Robert P. Casey, Jr. received a 42% positive rating and a 23% negative rating. U.S. Senator John Fetterman posted similar numbers with a 41% positive rating and a 29% negative rating. U.S. Treasury Secretary Janet Yellen’s job performance was viewed positively by 36% of the respondents; negatively by 27%. Federal Reserve Board Chairman Jerome Powell received a 29% positive/27% negative rating.

At the state level, Governor Josh Shapiro received a 55% positive job approval rating against a 26% negative rating. Pennsylvania Attorney General Michelle Henry is viewed positively by 32% of the respondents; negatively by 25%. Auditor General Timothy DeFoor posited a 24% positive/21% negative rating while state Treasurer Stacey Garrity received a 32% positive/28% negative rating.

Among institutions, the U.S. Senate received a 43% positive/44% negative rating while the U.S. House of Representatives posted a 39% positive/40% negative rating. The Supreme Court of the United States earned a 40% positive/35% negative rating. At the state level, the Pennsylvania Senate received a 40% positive/38% negative rating while the Pennsylvania House of Representatives received a 36% positive/39% negative rating. Respondents gave the Pennsylvania Supreme Court a 36% positive/35% negative rating.


 The Spring 2024 Keystone Business Climate Survey of business owners, CEOs and top line managers was conducted electronically from April 23, 2024 – April 26, 2024 with a total of 185 completed responses. Of those participating 39% were the owners of the businesses; 13% were the CEO/COO/CFO; 13% a state manager; and 21% were a local manager.

Twenty-Four percent of the businesses responding are located in southeastern Pennsylvania; 18% in northwestern Pennsylvania; 16% in northeastern Pennsylvania; 14% in southwestern Pennsylvania; 10% in northcentral Pennsylvania; 7% in southcentral Pennsylvania; 6% in Altoona/Johnstown; and 5% in the Lehigh Valley.

Complete numeric results of the Spring 2024 Keystone Business Climate Survey can be found at

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly American Radio Journal and Lincoln Radio Journal.  His e-mail address is [email protected])

Permission to reprint is granted provided author and affiliation are cited.