Release Date: 06/ 01/ 2005
CONTACT: Armando Paolino, (203) 758-8981 or Jim Jennings, (240) 645-4099
HARTFORD, June 1, 2005—Connecticut’s small-business community has a sour view on the state’s business environment even though their individual businesses are doing well, according to the second quarter Connecticut Small-Business ConditionsSM economic survey.
A net seven percent said they felt the state’s business climate was supportive, while a net one-third (percentage supportive minus percentage negative) report that business conditions in their market were good.
The report’s data, which was released today by the National Federation of Independent Business/Connecticut, provides an overview of small-business conditions within Connecticut and compares them with neighboring states. In New York, for example, the small-business community’s outlook mirrors that of Connecticut, while Massachusetts owners have a rosier outlook on their state’s support for small business.
The business owners report that while the business climate is stable, they do see some improvement on the horizon. However, the majority of small businesses report they have no plans to purchase new equipment, vehicles or upgrade their technology. Likewise, they say hiring is slow, with only a 16 percent reporting one or more job opening.
Part of that caution can be traced to the impact of high energy costs. A net 16 percent of those surveyed said costs were placing a serious burden on their firm, according to Armando Paolino, NFIB/Connecticut state director.
“While the individual small-business owners may be doing well, I think they feel that the state is not as supportive of them as it should be,” said Paolino. “That view is a direct result of this year’s legislature which has had some pretty serious anti-business legislation.”
He noted that while many business owners reported their sales had been good or very good over the last three months, profits slipped.
Another problem facing the small-business owners is the cost of payroll. Nineteen percent reported that payroll costs had risen over the last three months and wages continue to have the highest cost pressure on them. Other problems plaguing the small firms include insurance, inflation, weak sales and taxes.
The business owners are optimistic, however, with more than half reporting that prospects are good for the business over the next three months, with sales prospects helping to bolster that view.
The Small Business Conditions reports are developed from surveys of small-business owners in selected states. The surveys are designed to determine the condition of the small-business economy in each particular state. The surveys are conducted every three months and results are released on the first day of the month following completion. The text of the questions and the complete response set to the survey can be found at www.NFIB.com/research.
| Connecticut Small-Business ConditionsSM | ||||||
| This chart shows the results from Connecticut and its comparative standing among selected nearby states. | ||||||
| Conn. | Mass. | N.Y. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 7 | 15 | 0 | ||
| Prior qtr. | 14 | 13 | 3 | |||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 39 | 33 | 22 | ||
| Prior qtr. | 33 | 33 | 17 | |||
| Net % "improving" | 5/2005 | 8 | 12 | 0 | ||
| Prior qtr. | 13 | 12 | 7 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 60 | 60 | 47 | ||
| Prior qtr. | 67 | 62 | 56 | |||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 47 | 41 | 48 | ||
| Prior qtr. | 56 | 47 | 63 | |||
| % Lower costs | 5/2005 | 2 | 6 | 4 | ||
| Prior qtr. | 2 | 4 | 2 | |||
| % Price increases | 5/2005 | 7 | 4 | 3 | ||
| Prior qtr. | 3 | 3 | 4 | |||
| % Greater productivity | 5/2005 | 19 | 10 | 13 | ||
| Prior qtr. | 11 | 16 | 10 | |||
| % Government policy | 5/2005 | 4 | 2 | 4 | ||
| Prior qtr. | 3 | 3 | 2 | |||
| % Seasonal/Weather | 5/2005 | 7 | 13 | 8 | ||
| 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 | |||
| Conn. | Mass. | N.Y. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 47 | 39 | 31 | ||
| Prior qtr. | 40 | 35 | 25 | |||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 29 | 26 | 10 | ||
| Prior qtr. | 18 | 18 | 12 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 16 | 17 | 21 | ||
| Prior qtr. | 22 | 19 | 22 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 15 | 15 | 16 | ||
| Prior qtr. | 22 | 17 | 29 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 46 | 51 | 45 | ||
| Prior qtr. | 50 | 53 | 56 | |||
| % Benefits | 5/2005 | 28 | 23 | 31 | ||
| Prior qtr. | 32 | 33 | 28 | |||
| Conn. | Mass. | N.Y. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 42 | 41 | ||
| Prior qtr. | 47 | 41 | 47 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 41 | 40 | ||
| Prior qtr. | 43 | 42 | 45 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 34 | 35 | 35 | ||
| Prior qtr. | 45 | 37 | 42 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 47 | 51 | 45 | ||
| Prior qtr. | 63 | 61 | 54 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 46 | 36 | 35 | ||
| Prior qtr. | 4 | 35 | 34 | |||
| % All credit needs not satisfied | 5/2005 | 3 | 7 | 6 | ||
| Prior qtr. | 8 | 9 | 12 | |||
| % No credit needs | 5/2005 | 45 | 51 | 50 | ||
| Prior qtr. | 47 | 51 | 47 | |||
| Conn. | Mass. | N.Y. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 52 | 50 | 54 | ||
| Prior qtr. | 60 | 48 | 56 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 15 | 18 | 14 | ||
| Prior qtr. | 22 | 17 | 16 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 10 | 9 | 11 | ||
| Prior qtr. | 13 | 11 | 17 | |||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 14 | 13 | 11 | ||
| Prior qtr. | 9 | 10 | 11 | |||
| % Taxes | 5/2005 | 12 | 10 | 11 | ||
| Prior qtr. | 11 | 9 | 16 | |||
| % Employee quality/costs | 5/2005 | 9 | 9 | 8 | ||
| Prior qtr. | 14 | 10 | 9 | |||
| % Insurance | 5/2005 | 19 | 17 | 16 | ||
| Prior qtr. | 21 | 22 | 17 | |||
| % Big-business competition | 5/2005 | 11 | 14 | 14 | ||
| Prior qtr. | 15 | 17 | 14 | |||
| % Inflation/Rising prices | 5/2005 | 12 | 11 | 10 | ||
| Prior qtr. | 5 | 11 | 11 | |||
| % Credit availability/Interest rates | 5/2005 | 3 | 3 | 1 | ||
| Prior qtr. | 2 | 2 | 5 | |||
| % Regulations/Red tape | 5/2005 | 7 | 7 | 7 | ||
| Prior qtr. | 9 | 9 | 7 | |||
| Connecticut Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Connecticut is headed? | |
| Very satisfied | 5% |
| Somewhat satisfied | 48% |
| Not too satisfied | 25% |
| Not at all satisfied | 16% |
| Don't know/Refused | 6% |
| Total | 100% |
| Have higher energy prices over the last three to four months imposed a burden on your business, OR have they actually benefited it? | |
| Very serious | 17% |
| Somewhat serious | 36% |
| Not too serious | 27% |
| Not at all serious | 11% |
| Benefited | 2% |
| Don't know/Refused | 8% |
| Total | 100% |
The Poll
NFIB’s Connecticut Small-Business ConditionsSM is a telephone survey of a random sample of Connecticut 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.
