Release Date: 06/ 01/ 2005
CONTACT: Michelle Bolton, (602) 263-7690 Tony Malandra, (415) 664-9685
Commercial environment for Main Street comes in fifth, but state ranks first in other key indicators
PHOENIX, June 1 -- The latest quarterly report released today from America's largest small-business advocacy organization showed Arizona continuing to perform well as a place for Main Street firms to open and prosper, but there were cautionary signs as well for policymakers.
"It's no surprise that we're performing better than such states as California, but part of the reason is that we've naturally had a pretty darn good business climate overall, a climate that is conducive to creating stable conditions," said Michelle Bolton, state director for the 10,000-member Arizona arm of NFIB, whose research division conducted the report. "That doesn't mean the legislature should not continue to work on such issues as tax reform, eliminating burdensome regulations and helping make health care more affordable. Were small businesses to get more cooperation from the governmental side, our high ratings could be a permanent condition."
In compiling its Arizona Small-Business ConditionsSM report, the first question NFIB asks small-business owners is to rank how supportive the state’s business environment – which includes government, banks, the media and community groups – is to them. Although Arizona scored the same as it did last time -- 32 percent net supportive rate – it was good enough to come in fifth best among the 26 largest state economies in the nation that the report measures. California, by comparison, scored a negative 1 percent; Colorado also had a 32-percent rating, but that was three points lower than its previous quarter; and Texas had 30 percent.
More importantly, Arizona came in first when small-business owners were asked to rank how good business conditions were, first in the net-percent-improving category, first in net-percent saying sales were good and first in net-percent claiming profits were good. But Bolton pointed out that although Arizona ranked first in all four categories, each represented a slippage from Arizona's first-quarter results.
Visit www.NFIB.com/AZ for information about NFIB’s activities in Arizona. 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 Sept. 1 and Dec. 1.
| 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 | 5/2005 | 32 | -1 | 32 | ||
| Prior qtr. | 32 | 16 | 35 | |||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 60 | 36 | 39 | ||
| Prior qtr. | 59 | 45 | 41 | |||
| Net % "improving" | 5/2005 | 29 | 14 | 23 | ||
| Prior qtr. | 35 | 18 | 27 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 68 | 60 | 61 | ||
| Prior qtr. | 79 | 63 | 68 | |||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 46 | 41 | 39 | ||
| Prior qtr. | 56 | 41 | 43 | |||
| % Lower costs | 5/2005 | 3 | 3 | 3 | ||
| Prior qtr. | 2 | 5 | 3 | |||
| % Price increases | 5/2005 | 3 | 5 | 3 | ||
| Prior qtr. | 3 | 4 | 5 | |||
| % Greater productivity | 5/2005 | 17 | 14 | 18 | ||
| Prior qtr. | 15 | 14 | 14 | |||
| % Government policy | 5/2005 | 3 | 6 | 3 | ||
| Prior qtr. | 4 | 7 | 4 | |||
| % Seasonal/Weather | 5/2005 | 9 | 10 | 15 | ||
| Prior qtr. | - | - | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Ariz. | Calif. | Colo. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 61 | 41 | 39 | ||
| Prior qtr. | 55 | 37 | 38 | |||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 41 | 27 | 21 | ||
| Prior qtr. | 37 | 24 | 29 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 22 | 22 | 20 | ||
| Prior qtr. | 26 | 19 | 16 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 19 | 16 | 14 | ||
| Prior qtr. | 22 | 13 | 13 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 54 | 52 | 53 | ||
| Prior qtr. | 53 | 53 | 57 | |||
| % Benefits | 5/2005 | 26 | 27 | 27 | ||
| Prior qtr. | 28 | 27 | 27 | |||
| Ariz. | Calif. | Colo. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 48 | 44 | 47 | ||
| Prior qtr. | 50 | 45 | 45 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 38 | 43 | ||
| Prior qtr. | 53 | 41 | 44 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 39 | 45 | ||
| Prior qtr. | 47 | 38 | 40 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 52 | 52 | 53 | ||
| Prior qtr. | 59 | 55 | 58 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 38 | 39 | 39 | ||
| Prior qtr. | 33 | 39 | 39 | |||
| % All credit needs not satisfied | 5/2005 | 7 | 7 | 6 | ||
| Prior qtr. | 10 | 7 | 4 | |||
| % No credit needs | 5/2005 | 47 | 47 | 49 | ||
| Prior qtr. | 53 | 49 | 52 | |||
| Ariz. | Calif. | Colo. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 57 | 48 | 34 | ||
| Prior qtr. | 55 | 43 | 50 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 21 | 19 | 15 | ||
| Prior qtr. | 24 | 17 | 15 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 10 | 12 | 12 | ||
| Prior qtr. | 19 | 13 | 8 | |||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 9 | 9 | 12 | ||
| Prior qtr. | 11 | 9 | 12 | |||
| % Taxes | 5/2005 | 7 | 11 | 10 | ||
| Prior qtr. | 9 | 9 | 12 | |||
| % Employee quality/costs | 5/2005 | 13 | 8 | 9 | ||
| Prior qtr. | 16 | 9 | 8 | |||
| % Insurance | 5/2005 | 14 | 17 | 15 | ||
| Prior qtr. | 15 | 18 | 19 | |||
| % Big-business competition | 5/2005 | 14 | 16 | 17 | ||
| Prior qtr. | 13 | 14 | 12 | |||
| % Inflation/Rising prices | 5/2005 | 13 | 11 | 14 | ||
| Prior qtr. | 11 | 10 | 9 | |||
| % Credit availability/Interest rates | 5/2005 | 3 | 3 | 3 | ||
| Prior qtr. | 3 | 4 | 6 | |||
| % Regulations/Red tape | 5/2005 | 11 | 10 | 4 | ||
| Prior qtr. | 9 | 11 | 10 | |||
| Arizona Quarterly Spotlight | |
| In what general area of the state budget are reductions MOST warranted? | |
| Education | 16% |
| Transportation | 9% |
| Economic development | 13% |
| Health | 12% |
| Public welfare | 12% |
| Police and corrections | 4% |
| Other | 6% |
| Don't know/Refused | 28% |
| Total | 100% |
| In what general area of the state budget are reductions LEAST warranted? | |
| Education | 20% |
| Transportation | 13% |
| Economic development | 7% |
| Health | 10% |
| Public welfare | 9% |
| Police and corrections | 11% |
| Other | 3% |
| Don't know/Refused | 27% |
| 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.
