Release Date: 03/ 01/ 2005
CONTACT: Martyn Hopper or Michael Shaw, (916) 448-9904
or Tony Malandra, (415) 664-9685
CALIFORNIA -- California's central valley and central coast regions are leading the state's slow economy recovery, according to a new quarterly survey released today by NFIB, America's largest small-business advocacy group.
"In almost all of the net categories, the central part of the state is outpacing northern and southern sectors," said Martyn Hopper, state director for the 35,000-member California chapter of NFIB. "While this is good news, California still has a long way to go in comparison to other states."
In compiling its California 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. California racked up an anemic 16 percent in the net supportive tally, while neighboring Oregon had 29 percent and Arizona 32 percent. In all, 26 states were surveyed by NFIB about their small-business climates. South Carolina had the best net overall climate with 40 percent, Washington the worst with a negative-9 percent. Still, if California's economy ever really takes off, its launch pad will clearly be its central regions.
When asked how business conditions were in their particular areas, central region small-business owners gave it a net 55 percent good rating, their southern counterparts, 45 percent, and their northern counterparts, 41 percent. More spectacularly, however, was the response to the question on the outlook for their businesses in the next three months. Central region small-business owners gave it a 71 percent net good rating, their northern counterparts, 66 percent, and southern counterparts, 59 percent.
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, September 1 and December 1.
| California Small-Business ConditionsSM | ||||||
| This chart shows the results within California and its principal regions. | ||||||
| Calif. | North. | Central | South. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 16 | 17 | 16 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 45 | 41 | 55 | 45 | |
| Prior qtr. | - | - | - | - | ||
| Net % "improving" | 2/2005 | 18 | 24 | 26 | 13 | |
| Prior qtr. | - | - | - | - | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 63 | 66 | 71 | 59 | |
| Prior qtr. | - | - | - | - | ||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 41 | 43 | 39 | 41 | |
| Prior qtr. | - | - | - | - | ||
| % Lower costs | 2/2005 | 5 | 2 | 4 | 7 | |
| Prior qtr. | - | - | - | - | ||
| % Price increases | 2/2005 | 4 | 5 | 7 | 3 | |
| Prior qtr. | - | - | - | - | ||
| % Greater productivity | 2/2005 | 14 | 13 | 18 | 14 | |
| Prior qtr. | - | - | - | - | ||
| % Government policy | 2/2005 | 7 | 4 | 6 | 8 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 14 | 5 | 0 | 19 | |
| Prior qtr. | - | - | - | - | ||
| % Cost increases | 2/2005 | 15 | 5 | 20 | 19 | |
| Prior qtr. | - | - | - | - | ||
| % Pressure on selling prices | 2/2005 | 5 | 15 | 10 | 0 | |
| Prior qtr. | - | - | - | - | ||
| % Lower productivity | 2/2005 | 3 | 0 | 0 | 5 | |
| Prior qtr. | - | - | - | - | ||
| % Government policies | 2/2005 | 32 | 35 | 60 | 29 | |
| Prior qtr. | - | - | - | - | ||
| Calif. | North. | Central | South. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 37 | 36 | 51 | 34 | |
| Prior qtr. | - | - | - | - | ||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 24 | 23 | 32 | 24 | |
| Prior qtr. | - | - | - | - | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 19 | 22 | 21 | 17 | |
| Prior qtr. | - | - | - | - | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 13 | 12 | 19 | 12 | |
| Prior qtr. | - | - | - | - | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 53 | 52 | 48 | 55 | |
| Prior qtr. | - | - | - | - | ||
| % Benefits | 2/2005 | 27 | 32 | 30 | 24 | |
| Prior qtr. | - | - | - | - | ||
| Calif. | North. | Central | South. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 45 | 41 | 50 | 46 | |
| Prior qtr. | - | - | - | - | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 41 | 39 | 42 | 41 | |
| Prior qtr. | - | - | - | - | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 38 | 39 | 38 | 37 | |
| Prior qtr. | - | - | - | - | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 55 | 57 | 57 | 53 | |
| Prior qtr. | - | - | - | - | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 39 | 38 | 36 | 40 | |
| Prior qtr. | - | - | - | - | ||
| % All credit needs not satisfied | 2/2005 | 7 | 7 | 7 | 6 | |
| Prior qtr. | - | - | - | - | ||
| % No credit needs | 2/2005 | 49 | 50 | 52 | 48 | |
| Prior qtr. | - | - | - | - | ||
| Calif. | North. | Central | South. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 43 | 45 | 49 | 41 | |
| Prior qtr. | - | - | - | - | ||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 17 | 18 | 19 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 13 | 13 | 11 | 14 | |
| Prior qtr. | - | - | - | - | ||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 9 | 10 | 7 | 10 | |
| Prior qtr. | - | - | - | - | ||
| % Taxes | 2/2005 | 9 | 11 | 9 | 9 | |
| Prior qtr. | - | - | - | - | ||
| % Employee quality/costs | 2/2005 | 9 | 9 | 10 | 9 | |
| Prior qtr. | - | - | - | - | ||
| % Insurance | 2/2005 | 18 | 19 | 22 | 17 | |
| Prior qtr. | - | - | - | - | ||
| % Big-business competition | 2/2005 | 14 | 13 | 12 | 15 | |
| Prior qtr. | - | - | - | - | ||
| % Inflation/Rising prices | 2/2005 | 10 | 7 | 9 | 11 | |
| Prior qtr. | - | - | - | - | ||
| % Credit availability/Interest rates | 2/2005 | 4 | 5 | 4 | 4 | |
| Prior qtr. | - | - | - | - | ||
| % Regulations/Red tape | 2/2005 | 11 | 11 | 12 | 11 | |
| Prior qtr. | - | - | - | - | ||
| California Quarterly Spotlight | ||||
| Calif. | North. | Central | South. | |
| Have higher energy prices experienced over the last year or so imposed a very serious, somewhat serious, not too serious, or not at all serious burden on your business? | ||||
| Very serious | 11% | 11% | 15% | 11% |
| Somewhat serious | 27% | 25% | 33% | 27% |
| Not too serious | 32% | 35% | 27% | 31% |
| Not at all serious | 23% | 23% | 19% | 24% |
| Don't know/Refused | 6% | 6% | 6% | 7% |
| Total | 100% | 100% | 100% | 100% |
| Which type of energy price increases most affect your business? | ||||
| Gasoline | 36% | 33% | 38% | 38% |
| Natural Gas | 7% | 10% | 5% | 6% |
| Electricity | 37% | 38% | 34% | 37% |
| Heating Oil | 2% | 3% | 1% | 1% |
| Diesel | 5% | 5% | 11% | 4% |
| Other | 3% | 6% | 5% | 2% |
| Don't know/Refused | 10% | 6% | 6% | 13% |
| Total | 100% | 100% | 100% | 100% |
The Poll
NFIB’s California Small-Business ConditionsSM is a telephone survey of a random sample of California’s small employers regarding business conditions within the state. “Small employer” is defined here as someone employing between one and 250 people (not including the owner(s)) in a for-profit business. Three separate regional surveys are conducted, each with a minimum of 350 respondents. The Northern California survey samples small employers in ZIP codes 94000-95199 and 95400-96199. San Jose, Sacramento and the Lake Tahoe area are included. The Central California survey samples small employers in ZIP codes 93200-93999 and 95200-95399. Stockton, Modesto, Salinas and Bakersfield are included. The Southern California survey samples small employers in ZIP codes 90000-93199. Santa Barbara, Oxnard and Barstow are included. The sampling error of each survey is ± 5 percentage points. State totals result by population weighting regional totals. 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.
