Release Date: 12/ 01/ 2005
CONTACT: Armando Paolino, (203) 758-8981 or Jim Jennings, (240) 645-4099
Profits, Prices Rise in Fourth Quarter
HARTFORD, Conn. -- Connecticut's small-business owners believe the state's economy is getting better, according to the Connecticut Small-Business ConditionsSM. The report's data, which was released today by the National Federation of Independent Business/Connecticut, provides an overview of small-business conditions within the state and compares them with neighboring states.
"Twice as many business owners said the overall state business climate was supportive of small business in the fourth quarter as compared to the third quarter. That could be a result of twice as many firms reporting net profits as "good" as compared to the September survey," said Armando Paolino, NFIB state director. He added that the government's decision to let the New London submarine base remain in Connecticut may add some fuel to that optimism.
"The cost of energy, insurance and materials continue to hobble small businesses," said Paolino. He noted that while the business owners said labor costs continue to rise, business owners are reporting greater productivity. "Lawmakers need to think about controlling labor costs—particularly benefits— when they think about next year's Legislative session." The survey contacted 350 small businesses in the state.
A net 29 percent said their profits during the fourth quarter could be considered "good," compared to a net 13 percent three months earlier. "Clearly, business has been on the upswing and more than half say the outlook for business in the next three months is good, citing sales prospects and greater productivity as a reason for their optimism." said Paolino.
When asked to rank their most important business problem, Connecticut small-business owners ranked the cost of insurance followed by taxes and competition from big-business.
| 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 | 11/2005 | 13 | 20 | -1 | ||
| Prior qtr. | 6 | 11 | 12 | |||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 35 | 34 | 17 | ||
| Prior qtr. | 29 | 41 | 29 | |||
| Net % "improving" | 11/2005 | 10 | 4 | -6 | ||
| Prior qtr. | 7 | 6 | 9 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 57 | 60 | 48 | ||
| Prior qtr. | 57 | 62 | 53 | |||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 46 | 49 | 40 | ||
| Prior qtr. | 47 | 45 | 47 | |||
| % Lower costs | 11/2005 | 5 | 5 | 6 | ||
| Prior qtr. | 4 | 3 | 3 | |||
| % Price increases | 11/2005 | 6 | 4 | 8 | ||
| Prior qtr. | 6 | 3 | 7 | |||
| % Greater productivity | 11/2005 | 16 | 14 | 15 | ||
| Prior qtr. | 10 | 14 | 13 | |||
| % Government policy | 11/2005 | 2 | 6 | 3 | ||
| Prior qtr. | 4 | 2 | 5 | |||
| % Seasonal/Weather | 11/2005 | 8 | 5 | 9 | ||
| Prior qtr. | 5 | 12 | 7 | |||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Conn. | Mass. | N.Y. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 43 | 39 | 34 | ||
| Prior qtr. | 38 | 48 | 42 | |||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 29 | 24 | 13 | ||
| Prior qtr. | 13 | 32 | 26 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 19 | 22 | 20 | ||
| Prior qtr. | 22 | 23 | 23 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 19 | 10 | 17 | ||
| Prior qtr. | 15 | 16 | 19 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 49 | 46 | 50 | ||
| Prior qtr. | 47 | 47 | 48 | |||
| % Benefits | 11/2005 | 27 | 35 | 30 | ||
| Prior qtr. | 35 | 35 | 29 | |||
| Conn. | Mass. | N.Y. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 41 | 40 | 48 | ||
| Prior qtr. | 41 | 41 | 46 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 41 | 37 | 46 | ||
| Prior qtr. | 41 | 41 | 46 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 43 | 36 | 44 | ||
| Prior qtr. | 34 | 38 | 43 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 53 | 53 | 55 | ||
| Prior qtr. | 58 | 52 | 55 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 39 | 35 | 40 | ||
| Prior qtr. | 31 | 40 | 32 | |||
| % All credit needs not satisfied | 11/2005 | 9 | 9 | 10 | ||
| Prior qtr. | 10 | 5 | 10 | |||
| % No credit needs | 11/2005 | 48 | 50 | 45 | ||
| Prior qtr. | 53 | 49 | 54 | |||
| Conn. | Mass. | N.Y. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 60 | 53 | 68 | ||
| Prior qtr. | 58 | 55 | 55 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 25 | 22 | 24 | ||
| Prior qtr. | 14 | 14 | 18 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 14 | 10 | 12 | ||
| Prior qtr. | 10 | 10 | 11 | |||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 9 | 10 | 10 | ||
| Prior qtr. | 9 | 9 | 11 | |||
| % Taxes | 11/2005 | 11 | 12 | 15 | ||
| Prior qtr. | 16 | 8 | 15 | |||
| % Employee quality/costs | 11/2005 | 11 | 10 | 9 | ||
| Prior qtr. | 7 | 11 | 7 | |||
| % Insurance | 11/2005 | 17 | 17 | 16 | ||
| Prior qtr. | 17 | 19 | 15 | |||
| % Big-business competition | 11/2005 | 14 | 12 | 10 | ||
| Prior qtr. | 14 | 13 | 13 | |||
| % Inflation/Rising prices | 11/2005 | 14 | 15 | 12 | ||
| Prior qtr. | 12 | 15 | 10 | |||
| % Credit availability/Interest rates | 11/2005 | 4 | 5 | 3 | ||
| Prior qtr. | 3 | 4 | 3 | |||
| % Regulations/Red tape | 11/2005 | 6 | 5 | 8 | ||
| Prior qtr. | 8 | 6 | 8 | |||
* Insufficient cases
| Connecticut Quarterly Spotlight | |
| Which of your total costs are rising most rapidly? | |
| Energy | 28% |
| Labor | 13% |
| Insurance | 27% |
| Materials | 21% |
| Some other | 2% |
| None rising rapidly | 2% |
| Don't know | 6% |
| Refused | 2% |
| Total | 100% |
| Which of your total costs are rising next most rapidly? | |
| Energy | 20% |
| Labor | 20% |
| Insurance | 25% |
| Materials | 22% |
| Some other | 4% |
| None rising rapidly | 3% |
| Don't know | 5% |
| Refused | 2% |
| 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.
