Release Date: 06/ 01/ 2005
CONTACT: Melody Harrison, (404) 876-8516 or Jim Brown, (615) 874-5288
Small-Business Owners Say Higher Energy Prices Cause of Some Concern
ATLANTA, June 1, 2005 – Georgia’s overall business climate remains good but a large percentage of small-business owners perceive higher energy prices as a serious problem, according to the Georgia Small-Business ConditionsSM. The report’s data, which was released today by the National Federation of Independent Business/Georgia, provides an overview of small-business conditions within Georgia and compares them with neighboring states.
“The data from NFIB/Georgia’s Small-Business Conditions clearly indicates Georgia is one of the best states in the nation to conduct business,” said NFIB/Georgia State Director Melody Harrison, noting a net 45 percent (positive percent minus negative percent) of respondents said business conditions are good – which is unchanged from last quarter and one of the nation’s best readings. “This report also indicates small-business owners believe the business environment is supportive, which is a key foundation for a strong economy.”
The net 45 percent business conditions number was in line with North Carolina (net 44 percent), South Carolina (net 45 percent) and Tennessee (net 44 percent), but trailed Florida (net 55 percent). A net 26 percent of respondents said business conditions are “improving,” down from a net 30 percent last quarter but ahead of Florida (net 20 percent), North Carolina (net 25 percent), South Carolina (net 22 percent) and Tennessee (net 14 percent). A net 36 percent said Georgia’s business environment is supportive, one of the best readings nationally.
Of those surveyed in Georgia, a net 49 percent of small employers reported that over the last three months their purchasing prices increased, while only a net 15 percent reported they had increased selling prices, with 74 percent saying they kept average selling prices the same.
“Small business is feeling some pressure from higher energy prices,” said Harrison, pointing to poll results that showed 42 percent of respondents said higher energy prices were a serious burden. “It hasn’t filtered to every small-business owner, but the trend will be something to watch.”
In response to higher energy prices, 21 percent of respondents said they had reduced energy use, 15 percent said they absorbed the higher cost with lower earnings, and 11 percent said they raised selling prices. Georgia small-business owners ranked inflation (16 percent), taxes (13 percent), weak sales (13 percent), employee quality or costs (12 percent), insurance (11 percent) and big-business competition (11 percent) as the most serious problems they face today.
###
The Small-Business ConditionsSM 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.
| Georgia Small-Business ConditionsSM | ||||||
| This chart shows the results from Georgia and its comparative standing among selected nearby states. | ||||||
| Ga. | Fla. | N.C. | S.C. | Tenn. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 36 | 26 | 42 | 38 | 32 |
| Prior qtr. | 37 | 32 | 36 | 40 | 31 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 45 | 55 | 44 | 45 | 44 |
| Prior qtr. | 52 | 61 | 38 | 55 | 47 | |
| Net % "improving" | 5/2005 | 26 | 20 | 25 | 22 | 14 |
| Prior qtr. | 30 | 28 | 27 | 26 | 21 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 64 | 60 | 65 | 69 | 61 |
| Prior qtr. | 73 | 72 | 70 | 70 | 68 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 40 | 44 | 39 | 43 | 45 |
| Prior qtr. | 41 | 42 | 57 | 47 | 46 | |
| % Lower costs | 5/2005 | 6 | 4 | 3 | 4 | 2 |
| Prior qtr. | 2 | 3 | 4 | 4 | 4 | |
| % Price increases | 5/2005 | 6 | 4 | 4 | 3 | 2 |
| Prior qtr. | 6 | 5 | 2 | 4 | 4 | |
| % Greater productivity | 5/2005 | 13 | 16 | 12 | 15 | 15 |
| Prior qtr. | 15 | 14 | 17 | 18 | 14 | |
| % Government policy | 5/2005 | 6 | 3 | 4 | 3 | 4 |
| Prior qtr. | 5 | 6 | 2 | 4 | 6 | |
| % Seasonal/Weather | 5/2005 | 8 | 8 | 12 | 16 | 15 |
| Prior qtr. | - | - | - | - | - | |
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Cost increases | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Pressure on selling prices | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Lower productivity | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Government policies | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| Ga. | Fla. | N.C. | S.C. | Tenn. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 42 | 53 | 45 | 49 | 36 |
| Prior qtr. | 43 | 54 | 39 | 43 | 41 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 28 | 37 | 32 | 34 | 24 |
| Prior qtr. | 26 | 39 | 24 | 24 | 27 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 18 | 24 | 19 | 21 | 15 |
| Prior qtr. | 20 | 23 | 20 | 20 | 16 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 12 | 17 | 12 | 12 | 13 |
| Prior qtr. | 18 | 17 | 16 | 10 | 15 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 60 | 55 | 57 | 60 | 53 |
| Prior qtr. | 57 | 55 | 57 | 61 | 58 | |
| % Benefits | 5/2005 | 21 | 26 | 24 | 21 | 29 |
| Prior qtr. | 27 | 25 | 24 | 23 | 24 | |
| Ga. | Fla. | N.C. | S.C. | Tenn. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 43 | 42 | 34 | 42 | 40 |
| Prior qtr. | 43 | 45 | 41 | 41 | 41 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 36 | 41 | 42 | 35 | 38 |
| Prior qtr. | 39 | 43 | 47 | 42 | 40 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 40 | 39 | 41 | 35 | 36 |
| Prior qtr. | 43 | 39 | 48 | 41 | 31 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 49 | 52 | 49 | 50 | 56 |
| Prior qtr. | 58 | 57 | 58 | 58 | 56 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 43 | 39 | 39 | 40 | 43 |
| Prior qtr. | 35 | 40 | 40 | 41 | 36 | |
| % All credit needs not satisfied | 5/2005 | 7 | 7 | 7 | 5 | 5 |
| Prior qtr. | 7 | 9 | 6 | 7 | 5 | |
| % No credit needs | 5/2005 | 42 | 48 | 48 | 50 | 47 |
| Prior qtr. | 53 | 46 | 51 | 48 | 56 | |
| Ga. | Fla. | N.C. | S.C. | Tenn. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 49 | 54 | 51 | 51 | 52 |
| Prior qtr. | 48 | 48 | 54 | 49 | 49 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 15 | 21 | 15 | 21 | 17 |
| Prior qtr. | 12 | 20 | 17 | 16 | 17 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 10 | 13 | 11 | 9 | 11 |
| Prior qtr. | 13 | 12 | 17 | 13 | 10 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 13 | 9 | 10 | 9 | 10 |
| Prior qtr. | 10 | 7 | 11 | 10 | 9 | |
| % Taxes | 5/2005 | 13 | 8 | 10 | 13 | 11 |
| Prior qtr. | 11 | 9 | 9 | 11 | 12 | |
| % Employee quality/costs | 5/2005 | 12 | 12 | 8 | 9 | 9 |
| Prior qtr. | 9 | 10 | 11 | 11 | 12 | |
| % Insurance | 5/2005 | 11 | 15 | 17 | 14 | 15 |
| Prior qtr. | 21 | 19 | 15 | 19 | 14 | |
| % Big-business competition | 5/2005 | 11 | 15 | 14 | 13 | 15 |
| Prior qtr. | 11 | 15 | 15 | 13 | 15 | |
| % Inflation/Rising prices | 5/2005 | 16 | 14 | 16 | 16 | 14 |
| Prior qtr. | 11 | 11 | 16 | 12 | 12 | |
| % Credit availability/Interest rates | 5/2005 | 3 | 3 | 2 | 3 | 4 |
| Prior qtr. | 4 | 3 | 4 | 3 | 4 | |
| % Regulations/Red tape | 5/2005 | 7 | 6 | 5 | 8 | 8 |
| Prior qtr. | 6 | 8 | 5 | 7 | 6 | |
| Georgia Quarterly Spotlight | |
| 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 | 14% |
| Somewhat serious | 28% |
| Not too serious | 32% |
| Not at all serious | 17% |
| Benefited | 2% |
| Don't know/Refused | 8% |
| Total | 100% |
| What is the single most important action you have recently taken in response to the rising cost of energy? | |
| Raised selling prices | 11% |
| Invested in energy-conserving equipment or vehicles |
7% |
| Reduced energy use | 21% |
| Absorbed higher costs with lower earnings | 15% |
| Reduced non-energy costs such as payroll | 3% |
| Increased promotion and/or advertising | 10% |
| Nothing | 7% |
| Other | 3% |
| Don't know/Refused | 24% |
| Total | 100% |
The Poll
NFIB’s Georgia Small-Business ConditionsSM is a telephone survey of a random sample of Georgia 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.
