Release Date: 03/ 01/ 2005
CONTACT: Michelle Bolton, (602) 263-7690 Tony Malandra, (415) 664-9685
Arizona’s small-business economy, the most important contributor to the state’s prosperity, is stable, but Main Street owners are a bit tentative on other key indicators, according to a new quarterly report issued today by the National Federation of Independent Business (NFIB), America’s largest small-business advocacy organization.
In compiling its Arizona Small-Business ConditionsSM report, one question NFIB asked small-business owners was to rank how supportive the state’s business environment – which included government, banks, the media, and community groups – was to them. While Arizona scored a respectable 32 percent net supportive rate – a little lower than Colorado’s 35 percent but twice as good as California’s 16 percent – more than a third of the respondents (31 percent) rated the support “neutral,” 10 percent said it was “not supportive,” and five percent said the climate was “not supportive at all.”
“The report has essentially reaffirmed what many have of us have felt, but now have quantifiable evidence to support, and that is Arizona’s economy is much better than California’s, but that’s not saying a whole lot,” said Michelle Bolton, state director for the 10,000-member Arizona chapter of NFIB. “When compared with the more apt Colorado small-business economy, we do better in some areas and worse in others, but what I think is essential is attitude.” To support her point, Bolton pointed to a question that asked small-business owners if business conditions in their particular area were improving, deteriorating, or more or less stable. While 41 percent said business conditions were either “rapidly improving,” “slowly improving,” or simply “improving,” more than half (52 percent) said they were just stable and another six percent either ranked it “deteriorating,” “slowly deteriorating,” or “rapidly deteriorating.”
For information about the Small-Business ConditionsSM project and other small-business research studies conducted by the NFIB Research Foundation, visit www.NFIB.com/research. Future surveys will be released on June 1, Sept. 1 and Dec. 1. On those dates, the survey will be compared to the previous quarter, as well as to neighboring states.
| Arizona Small-Business ConditionsSM | ||||||
| This chart shows the results from Arizona and its comparative standing among selected nearby states. | ||||||
| Ariz. | Calif. | Colo. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 32 | 16 | 35 | ||
| Prior qtr. | - | - | - | |||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 59 | 45 | 41 | ||
| Prior qtr. | - | - | - | |||
| Net % "improving" | 2/2005 | 35 | 18 | 27 | ||
| Prior qtr. | - | - | - | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 79 | 63 | 68 | ||
| Prior qtr. | - | - | - | |||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 56 | 41 | 43 | ||
| Prior qtr. | - | - | - | |||
| % Lower costs | 2/2005 | 2 | 5 | 3 | ||
| Prior qtr. | - | - | - | |||
| % Price increases | 2/2005 | 3 | 4 | 5 | ||
| Prior qtr. | - | - | - | |||
| % Greater productivity | 2/2005 | 15 | 14 | 14 | ||
| Prior qtr. | - | - | - | |||
| % Government policy | 2/2005 | 4 | 7 | 4 | ||
| Prior qtr. | - | - | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 20 | 14 | 25 | ||
| Prior qtr. | - | - | - | |||
| % Cost increases | 2/2005 | 0 | 15 | 0 | ||
| Prior qtr. | - | - | - | |||
| % Pressure on selling prices | 2/2005 | 0 | 5 | 8 | ||
| Prior qtr. | - | - | - | |||
| % Lower productivity | 2/2005 | 0 | 3 | 17 | ||
| Prior qtr. | - | - | - | |||
| % Government policy | 2/2005 | 0 | 32 | 0 | ||
| Prior qtr. | - | - | - | |||
| Ariz. | Calif. | Colo. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 55 | 37 | 38 | ||
| Prior qtr. | - | - | - | |||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 37 | 24 | 29 | ||
| Prior qtr. | - | - | - | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 26 | 19 | 16 | ||
| Prior qtr. | - | - | - | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 22 | 13 | 13 | ||
| Prior qtr. | - | - | - | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 53 | 53 | 57 | ||
| Prior qtr. | - | - | - | |||
| % Benefits | 2/2005 | 28 | 27 | 27 | ||
| Prior qtr. | - | - | - | |||
| Ariz. | Calif. | Colo. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 50 | 45 | 45 | ||
| Prior qtr. | - | - | - | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 53 | 41 | 44 | ||
| Prior qtr. | - | - | - | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 47 | 38 | 40 | ||
| Prior qtr. | - | - | - | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 59 | 55 | 58 | ||
| Prior qtr. | - | - | - | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 33 | 39 | 39 | ||
| Prior qtr. | - | - | - | |||
| % All credit needs not satisfied | 2/2005 | 10 | 7 | 4 | ||
| Prior qtr. | - | - | - | |||
| % No credit needs | 2/2005 | 53 | 49 | 52 | ||
| Prior qtr. | - | - | - | |||
| Ariz. | Calif. | Colo. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 55 | 43 | 50 | ||
| Prior qtr. | - | - | - | |||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 24 | 17 | 15 | ||
| Prior qtr. | - | - | - | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 19 | 13 | 8 | ||
| Prior qtr. | - | - | - | |||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 11 | 9 | 12 | ||
| Prior qtr. | - | - | - | |||
| % Taxes | 2/2005 | 9 | 9 | 12 | ||
| Prior qtr. | - | - | - | |||
| % Employee quality/costs | 2/2005 | 16 | 9 | 8 | ||
| Prior qtr. | - | - | - | |||
| % Insurance | 2/2005 | 15 | 18 | 19 | ||
| Prior qtr. | - | - | - | |||
| % Big-business competition | 2/2005 | 13 | 14 | 12 | ||
| Prior qtr. | - | - | - | |||
| % Inflation/Rising prices | 2/2005 | 11 | 10 | 9 | ||
| Prior qtr. | - | - | - | |||
| % Credit availability/Interest rates | 2/2005 | 3 | 4 | 6 | ||
| Prior qtr. | - | - | - | |||
| % Regulations/Red tape | 2/2005 | 9 | 11 | 10 | ||
| Prior qtr. | - | - | - | |||
| Arizona Quarterly Spotlight | |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 14% |
| Worker compensation | 6% |
| Product or professional liability | 18% |
| Property and casualty | 11% |
| Employee health | 30% |
| Don't know/Refused | 21% |
| Total | 100% |
| Were you able to largely offset those intended premium increases by raising deductibles, limiting coverages, and things of that nature? | |
| Yes | 33% |
| No | 48% |
| Don't know/Refused | 18% |
| Total | 100% |
The Poll
NFIB’s Arizona Small-Business ConditionsSM is a telephone survey of a random sample of Arizona small employers regarding business conditions within the state. “Small employer” is defined here as employing between one and 250 people (not including the owner(s)) in a for-profit business. Each edition of the survey has a minimum of 350 respondents. The sampling error is ± 5 percentage points. Data are collected quarterly in the months of February, May, August and November, beginning in February 2005. The MRCGroup of Las Vegas conducts the survey for the NFIB Research Foundation.
The Sponsor
The NFIB Research Foundation is a 501 (c)(3) organization that provides policy-makers, media, educators, small-business owners and other interested parties empirically based information on small business and small-business owners. The Foundation is affiliated with the National Federation of Independent Business, the nation’s largest small- and independent-business advocacy organization, and is located in Washington, D.C.
