Release Date: 06/ 01/ 2005
CONTACT: Dave Brasher, (515) 243-4723 or Kevin Walter, (614) 221-4107
Overall business climate scores high in latest Small-Business Conditions report
DES MOINES, June 1, 2005 – Iowa’s overall business climate is again scoring well against the competition from surrounding states according to the Iowa Small-Business ConditionsSM report. The report’s data, which was released today by the National Federation of Independent Business/Iowa, provides an overview of small-business conditions within Iowa and compares them with neighboring states.
“Iowa’s small-business owners continue to show a very positive attitude toward the state’s environment for business as well as general market conditions,” says Dave Brasher, NFIB/Iowa state director. “Their upbeat views lead five other surrounding states and, among the 26 states measured nationally, Iowa’s small-business owners currently are more positive than those in all but three states.”
A net 45 percent of the state’s small employers believed business conditions in their market area are “good.” Most also saw those conditions “improving.” A net 64 percent characterized the outlook for business over the next three months as “good” citing sales prospects as the primary reason for their view.
Sixteen percent of small businesses reported "one or more current job openings. Over the same three-month period, 36 percent of small-business owners made capital expenditures. While 33 percent of the respondents reported spending on technology upgrades, the number of owners making expenditures for employee training was also 33 percent.
Of those surveyed in Iowa, a net 33 percent indicated that profits were “good,” and a net 55 percent of those same respondents characterized sales as “good.” Overall, a net 58 percent of small employers reported that over the last three months their purchasing prices rose, while a net 22 percent reported they had increased selling prices.
When asked to rank their most important business problem, Iowa small-business owners identified the cost of insurance as the most serious of all conditions, with inflation and rising prices right behind.
Also, when asked if they could improve their workforce in just one area, 24 percent of Iowa small-business owners believe their employees could use better people skills. “While we find that interesting, we find it even more so when you consider that improved work ethic and better job-specific skills followed close behind at 22 and 20 percent respectively,” said Brasher.
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.
| Iowa Small-Business ConditionsSM | ||||||
| This chart shows the results from Iowa and its comparative standing among selected nearby states. | ||||||
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 34 | 6 | 26 | 29 | 31 |
| Prior qtr. | 33 | 16 | 27 | 30 | 22 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 45 | 30 | 41 | 43 | 40 |
| Prior qtr. | 37 | 29 | 38 | 43 | 33 | |
| Net % "improving" | 5/2005 | 9 | 10 | 15 | 15 | 19 |
| Prior qtr. | 15 | 14 | 12 | 21 | 10 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 64 | 61 | 61 | 62 | 68 |
| Prior qtr. | 61 | 59 | 63 | 70 | 66 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 41 | 46 | 46 | 42 | 44 |
| Prior qtr. | 42 | 43 | 57 | 50 | 59 | |
| % Lower costs | 5/2005 | 3 | 5 | 2 | 2 | 2 |
| Prior qtr. | 3 | 3 | 2 | 2 | 1 | |
| % Price increases | 5/2005 | 5 | 4 | 5 | 5 | 5 |
| Prior qtr. | 4 | 3 | 3 | 4 | 5 | |
| % Greater productivity | 5/2005 | 14 | 12 | 13 | 16 | 14 |
| Prior qtr. | 16 | 13 | 15 | 15 | 12 | |
| % Government policy | 5/2005 | 4 | 5 | 3 | 4 | 4 |
| Prior qtr. | 5 | 5 | 3 | 5 | 3 | |
| % Seasonal Weather | 5/2005 | 18 | 7 | 12 | 13 | 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 | |
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 55 | 34 | 39 | 45 | 43 |
| Prior qtr. | 44 | 22 | 27 | 39 | 37 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 33 | 15 | 23 | 24 | 23 |
| Prior qtr. | 29 | 9 | 12 | 23 | 20 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 16 | 19 | 16 | 19 | 20 |
| Prior qtr. | 15 | 18 | 16 | 17 | 19 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 16 | 11 | 17 | 16 | 12 |
| Prior qtr. | 13 | 20 | 22 | 25 | 23 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 58 | 51 | 51 | 54 | 53 |
| Prior qtr. | 55 | 53 | 53 | 59 | 52 | |
| % Benefits | 5/2005 | 24 | 29 | 30 | 26 | 33 |
| Prior qtr. | 26 | 30 | 30 | 29 | 35 | |
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 33 | 44 | 47 | 46 | 41 |
| Prior qtr. | 41 | 43 | 46 | 39 | 46 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 36 | 43 | 46 | 43 | 41 |
| Prior qtr. | 46 | 42 | 46 | 44 | 55 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 33 | 40 | 41 | 35 | 36 |
| Prior qtr. | 37 | 43 | 47 | 38 | 43 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 53 | 56 | 53 | 49 | 56 |
| Prior qtr. | 51 | 59 | 56 | 55 | 48 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 41 | 41 | 43 | 41 | 41 |
| Prior qtr. | 47 | 36 | 35 | 38 | 45 | |
| % All credit needs not satisfied | 5/2005 | 4 | 6 | 5 | 5 | 6 |
| Prior qtr. | 5 | 8 | 8 | 6 | 8 | |
| % No credit needs | 5/2005 | 49 | 46 | 43 | 45 | 46 |
| Prior qtr. | 43 | 52 | 52 | 53 | 43 | |
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 58 | 47 | 56 | 53 | 54 |
| Prior qtr. | 50 | 55 | 60 | 54 | 58 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 22 | 17 | 19 | 20 | 20 |
| Prior qtr. | 14 | 18 | 21 | 21 | 15 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 9 | 9 | 9 | 11 | 8 |
| Prior qtr. | 10 | 15 | 12 | 12 | 9 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 9 | 13 | 13 | 12 | 10 |
| Prior qtr. | 8 | 10 | 12 | 7 | 9 | |
| % Taxes | 5/2005 | 11 | 15 | 11 | 12 | 15 |
| Prior qtr. | 9 | 7 | 8 | 14 | 12 | |
| % Employee quality/costs | 5/2005 | 7 | 6 | 7 | 7 | 6 |
| Prior qtr. | 8 | 8 | 9 | 10 | 9 | |
| % Insurance | 5/2005 | 19 | 17 | 18 | 19 | 23 |
| Prior qtr. | 19 | 21 | 21 | 17 | 25 | |
| % Big-business competition | 5/2005 | 12 | 14 | 14 | 12 | 15 |
| Prior qtr. | 17 | 11 | 17 | 12 | 14 | |
| % Inflation/Rising prices | 5/2005 | 19 | 13 | 14 | 13 | 13 |
| Prior qtr. | 10 | 16 | 13 | 12 | 14 | |
| % Credit availability/Interest rates | 5/2005 | 4 | 3 | 3 | 3 | 3 |
| Prior qtr. | 1 | 3 | 2 | 4 | 3 | |
| % Regulations/Red tape | 5/2005 | 7 | 8 | 7 | 8 | 4 |
| Prior qtr. | 11 | 9 | 8 | 9 | 7 | |
*Insufficient cases
| Iowa Quarterly Spotlight | |
| Are you very satisfied, somewhat satisfied, somewhat unsatisfied, or very unsatisfied with the quality of your present workforce? | |
| Very satisfied | 61% |
| Somewhat satisfied | 31% |
| Somewhat unsatisfied | 2% |
| Very unsatisfied | 1% |
| Don't know/Refused | 4% |
| Total | 100% |
| If you could improve your workforce in just ONE area, would that area be________? | |
| Greater language facility | 0% |
| People skills | 24% |
| Job-specific skills | 20% |
| Basic literacy and math | 3% |
| Work ethic | 22% |
| English proficiency | 5% |
| Other | 6% |
| Satisfied/Can't improve | 2% |
| Don't know/Refused | 18% |
| Total | 100% |
The Poll
NFIB’s Iowa Small-Business ConditionsSM is a telephone survey of a random sample of Iowa 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.
