Release Date: 09/ 01/ 2005
CONTACT: Michelle Bolton, (602) 263-7690 Tony Malandra, (415) 664-9685
Quarterly Report: State Shoots Past Colorado and Leaves California in the Dust
PHOENIX -- If small businesses are the backbone of the American economy, Arizona is one of its strongest vertebrae, according to the latest quarterly report released today by the Research Foundation of the National Federation of Independent Business, the nation's largest small-business organization.
NFIB Small-Business ConditionsSM reports on the nation’s 26 largest economy states. The survey begins by asking small-business owners to assess how supportive the state’s business environment – which includes government, banks, media and community groups – is to them. Arizona’s nearly 36 percent net-support puts it at fifth best in the nation, eight points better than similar-size Colorado and 30 points better than California.
Upon closer inspection, the numbers are even better. Arizona ranked first in market area business conditions, first in net change in market area business conditions, first in net outlook for next three months, first in net sales, first in net profits, and first in current job openings.
"These great numbers are the result of a legislature that not only resisted tax increases, but also reduced some taxes, the most important of which were the business property assessment ratios," said Michelle Bolton, state director for the 10,000-member NFIB/Arizona. "Holding the line on regulations and keeping state budget growth to a minimum also went a long way toward bearing the fruit we see in this report. It is our hope that the next legislative session sends the same message about government's involvement in economies: less is more."
On two questions specific to Arizona, small-business owners were evenly split on how important immigrant labor was to businesses in their area, with almost 47 percent saying it was either “not too important” or “not important at all,” versus 44 percent who said it was “very important” or “somewhat important.” When asked to describe the role immigrant labor plays in their areas, 9 percent said it provided skills not otherwise available, 30 percent said it fills jobs that otherwise wouldn't be filled, 11 percent said it crowds out American workers, 27 percent said it had no appreciable role, and 21 percent didn't know. (Averages were rounded off) The survey questions did not distinguish between legal and illegal immigrants. "We should make it clear that small-business owners were asked only about immigrant labor as it related to just their firms, and not about broader social issues," said Bolton.
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.
| 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 | 8/2005 | 36 | 6 | 28 | ||
| Prior qtr. | 32 | -1 | 32 | |||
| Business conditions in market area | ||||||
| Net % "good" | 8/2005 | 63 | 48 | 44 | ||
| Prior qtr. | 60 | 36 | 39 | |||
| Net % "improving" | 8/2005 | 30 | 17 | 20 | ||
| Prior qtr. | 29 | 14 | 23 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 8/2005 | 76 | 67 | 64 | ||
| Prior qtr. | 68 | 60 | 61 | |||
| Reason for optimism | ||||||
| % Sales prospects | 8/2005 | 38 | 42 | 44 | ||
| Prior qtr. | 46 | 41 | 39 | |||
| % Lower costs | 8/2005 | 3 | 3 | 1 | ||
| Prior qtr. | 3 | 3 | 3 | |||
| % Price increases | 8/2005 | 5 | 3 | 3 | ||
| Prior qtr. | 3 | 5 | 3 | |||
| % Greater productivity | 8/2005 | 13 | 16 | 10 | ||
| Prior qtr. | 17 | 14 | 18 | |||
| % Government policy | 8/2005 | 3 | 4 | 4 | ||
| Prior qtr. | 3 | 6 | 3 | |||
| % Seasonal/Weather | 8/2005 | 11 | 9 | 11 | ||
| Prior qtr. | - | 10 | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 8/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 8/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 8/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 8/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 8/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Ariz. | Calif. | Colo. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 8/2005 | 60 | 51 | 52 | ||
| Prior qtr. | 61 | 41 | 39 | |||
| Profits | ||||||
| Net % profits "good" | 8/2005 | 46 | 33 | 33 | ||
| Prior qtr. | 41 | 27 | 21 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 8/2005 | 29 | 26 | 19 | ||
| Prior qtr. | 22 | 22 | 20 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 8/2005 | 20 | 15 | 12 | ||
| Prior qtr. | 19 | 16 | 14 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 8/2005 | 55 | 51 | 56 | ||
| Prior qtr. | 54 | 52 | 53 | |||
| % Benefits | 8/2005 | 23 | 25 | 22 | ||
| Prior qtr. | 26 | 27 | 27 | |||
| Ariz. | Calif. | Colo. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 8/2005 | 43 | 45 | 42 | ||
| Prior qtr. | 48 | 44 | 47 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 43 | 45 | 39 | ||
| Prior qtr. | 41 | 38 | 43 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 43 | 43 | 41 | ||
| Prior qtr. | 39 | 39 | 45 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 8/2005 | 63 | 53 | 52 | ||
| Prior qtr. | 52 | 52 | 53 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 8/2005 | 41 | 37 | 37 | ||
| Prior qtr. | 38 | 39 | 39 | |||
| % All credit needs not satisfied | 8/2005 | 4 | 5 | 5 | ||
| Prior qtr. | 7 | 7 | 6 | |||
| % No credit needs | 8/2005 | 50 | 52 | 49 | ||
| Prior qtr. | 47 | 47 | 49 | |||
| Ariz. | Calif. | Colo. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 8/2005 | 49 | 50 | 50 | ||
| Prior qtr. | 57 | 48 | 34 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 8/2005 | 16 | 17 | 17 | ||
| Prior qtr. | 24 | 19 | 15 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 8/2005 | 12 | 12 | 10 | ||
| Prior qtr. | 10 | 12 | 12 | |||
| Single most important business problem | ||||||
| % Weak sales | 8/2005 | 8 | 9 | 7 | ||
| Prior qtr. | 9 | 9 | 12 | |||
| % Taxes | 8/2005 | 7 | 9 | 11 | ||
| Prior qtr. | 7 | 11 | 10 | |||
| % Employee quality/costs | 8/2005 | 15 | 10 | 11 | ||
| Prior qtr. | 13 | 8 | 9 | |||
| % Insurance | 8/2005 | 12 | 19 | 16 | ||
| Prior qtr. | 14 | 17 | 15 | |||
| % Big-business competition | 8/2005 | 15 | 15 | 16 | ||
| Prior qtr. | 14 | 16 | 17 | |||
| % Inflation/Rising prices | 8/2005 | 14 | 13 | 13 | ||
| Prior qtr. | 13 | 11 | 14 | |||
| % Credit availability/Interest rates | 8/2005 | 3 | 3 | 3 | ||
| Prior qtr. | 3 | 3 | 3 | |||
| % Regulations/Red tape | 8/2005 | 7 | 9 | 5 | ||
| Prior qtr. | 11 | 10 | 4 | |||
| Arizona Quarterly Spotlight | |
| How important is immigrant labor to business in your area? | |
| Very important | 20% |
| Somewhat important | 24% |
| Not too important | 15% |
| Not at all important | 32% |
| Don't know/Refused | 9% |
| Total | 100% |
| Which best describes the roll of immigrant labor in your area? | |
| Provides skills not otherwise available | 9% |
| Fills jobs that wouldn't otherwise be filled | 30% |
| Crowds out American workers | 11% |
| No appreciable role | 27% |
| Don't know/Refused | 24% |
| 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.
