CalChamber Releases 2011 Business Climate Study


(March 18, 2011) On Thursday, the California Foundation for Commerce and Education released its 2011 survey of business executives detailing current attitudes about the state’s economy, business climate, and budget.  The study was sponsored by the California Chamber of Commerce.

“This assessment of California’s business climate shows that the economy, burdensome regulations and the state budget crisis continue to weigh heavily on the minds of business owners,” said Allan Zaremberg, CalChamber President and CEO.  “Policy makers and elected officials must commit to the hard choices needed to create certainty for job creators so that California can turn things around.” 

The California Business Executives Attitudes survey was conducted between February 22, 2011 and March 9, 2011.  A total of 874 California business executives were polled for the survey.

Attitudes on the Economy

Overall, the survey revealed that widespread pessimism remains about the state’s economy:

  • 15% said that the state was headed in the right direction;
  • 85% said the state is on the wrong track, an increase of 8% from 2008.
  • With respect to the current economy:
  • 98% responded that it was fair or poor;
  • 2% said the economy was good.

View PowerPoint Slideshow (PPT - 1.3M)

However, business leaders are relatively optimistic about an economic recovery compared to 2008:

  • 20% believe that the economy will be better in one year, an increase of 10% from 2008 survey;
  • 49% believe it will be the same, compared to 46% in 2008;
  • 31% say it will be worse, a decrease of 13% from 2008.

When asked about the state of their own businesses, respondents were more optimistic than in the 2008 survey:

  • 37% of executives indicated that they believe their situation will be better in one year, an increase of 8% from 2008;
  • 48% said their situation will likely be the same, compared to 57% in 2008;
  • 15% said things will likely be worse, compared to 14% in 2008.
Biggest Disadvantages of Doing Business in California

The survey asked employers to assess the disadvantages of doing business in California:

  • By far respondents believed too much government regulation was a primary factor in creating a disadvantage for California companies (40%);
  • Others cited high state and local taxes (13%) and the state budget deficit (12%).
Top Issues Leaders Should Address

Survey respondents believe the most important issues to be addressed by state leaders are:

  • Far and away, resolving the state budget deficit, improving the economy, and job creation were critical to business leaders.  A combined total of 92% of respondents believe these items should be priorities for state leaders;
  • Changing labor regulations governing overtime, wages, rest periods and benefits was also important with a combined total of 21% of respondents ranking this as their first or second priority.
Resolving the California Budget Crisis

The survey also asked respondents how California state government should deal with the budget deficit. Business leaders strongly supported tough budget medicine to address the state’s fiscal mess once and for all:

  • Net support of 94% for a balanced budget without gimmicks, no matter what the mix of spending cuts and tax increases;
  • Net support of 89% for capping state spending growth to inflation plus population;
  • Net support of 89% for reforming public pensions to resemble private sector 401(k) plans;
  • Net support of 87% for ensuring that one-time revenues cannot finance ongoing programs;
  • Net support of 84% for conforming state overtime rules to federal rules;
  • Net support of 78% for ensuring benefits of new regulations exceed the cost to the economy.

The entire survey can be found here.