Editorial

Not So Business Friendly

If possession is nine-tenths of law on ownership, then perception represents an equally important amount of reality, especially in the business world. That’s one conclusion that can be drawn from a Bank of America survey of 200 North Carolina business leaders unveiled at last month’s Economic Forecast Forum. The survey, presented at the Forum by BofA North Carolina President Graham Denton, shows that a majority of executives at larger companies are relatively bullish about business trends in the year ahead. But there’s a catch.

First, let’s look at the data. Nearly 70 percent of the survey respondents expect strong or moderate growth in North Carolina’s economy in 2004 and more than half said they plan to expand payrolls. Nearly 60 percent of those interviewed for the BofA survey said they will budget for greater capital expenditures. Most said they don’t anticipate any big spike in interest rates this year.

Now, here’s the catch. The owners and CEOs surveyed generally have a positive outlook on the year ahead even though they perceive that state government isn’t doing much to help their companies grow.

In one key question they were asked: Do you believe the regulatory environment in North Carolina (a) strongly encourages business growth, (b) moderately encourages business growth, (c) doesn’t encourage business growth but does not hurt growth, (d) moderately hampers business growth, or (e) strongly hampers business growth.

Given that North Carolina supposedly has the nation’s best business climate, one would think that the people who actually are in business here would feel that the state is on their side. But the data say otherwise.

Thirty-six percent of the respondents said North Carolina’s regulatory environment either moderately or strongly encourages business growth. Thirty-nine percent said state policies at best are a wash. Twenty-five percent said they think the state’s regulatory environment either moderately or strongly discourages business growth.

The numbers are shocking in light of all that state government has done — or thinks it has done — to encourage economic growth. Perhaps the state simply has done a poor job of communicating how business-friendly it is to the people who actually are in business here. Perhaps it is because many business leaders perceive that the state mostly is interested in attracting new industries from other states instead of helping the ones already here.

Footnote: The biggest applause line at the Forum was when Gov. Mike Easley called for lowering the state’s corporate income tax rate, which is the third-highest in the Southeast. My guess is the room would have rocked if the governor also had proposed easing up on environmental regulations and workers’ comp rules —  two other areas where survey respondents said the state isn’t very business friendly. -- Steve Tuttle