Release Date: 09/ 01/ 2005
CONTACT: Mike Diegel or Melissa Sharp, (202) 554-9000
Job Outlook Stable; Immigrant Labor Not Seen as Critical Need
DES MOINES, Iowa -- Small-business owners became more pessimistic about the state's outlook for business in the fourth quarter, largely due to a drop in sales and earnings last quarter, according to the Iowa Small-Business ConditionsSM. The report's data, 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.
A net 55 percent (positive percent minus negative percent) of the state's small employers believed the business outlook for the next three months is good, down from a net 64 percent in the second quarter. The number of those reporting sales were good dropped from a net 55 percent in June to a net 43 percent this past quarter, while a net 25 percent characterized profits as "good," down from a net 33 percent in June.
"While the number of small-business owners who characterized business conditions as 'good' or 'improving' remained stable, there's no doubt that they are feeling some concern about sales and profits moving into the next quarter," said Dave Brasher, NFIB/Iowa's state director.
"Increasing prices, particular for energy, coupled with a reluctance to raise selling prices, are the likely culprits," Brasher said. A net 59 percent reported increased purchasing prices, while the net percent that reported they raised prices in the past quarter dropped from a net 22 percent to a net 15 percent.
Small-business owners in Illinois, Minnesota and Wisconsin shared the pessimism for the next quarter. Those surveyed in Illinois who described the outlook as "good" for the next three months dropped from a net 61 percent to a net 51 percent. In Minnesota, the numbers dropped from a net 61 percent to a net 53 percent, while in Wisconsin, the numbers fell from a net 68 percent to a net 60 percent.
At the same time, the outlook for hiring in Iowa is stable, with a net 18 percent of respondents reporting that they have one or more job openings. In a related question about the importance of immigrant labor to business, 60 percent of respondents said it was either "not too important" or "not at all important." When asked to describe the role immigrant labor plays, 23 percent said immigrants fill jobs that otherwise would not be filled, while only 12 percent said immigrants crowd out American workers.
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 | 8/2005 | 32 | 18 | 17 | 28 | 17 |
| Prior qtr. | 34 | 6 | 26 | 29 | 31 | |
| Business conditions in market area | ||||||
| Net % "good" | 8/2005 | 41 | 31 | 33 | 44 | 36 |
| Prior qtr. | 45 | 30 | 41 | 43 | 40 | |
| Net % "improving" | 8/2005 | 5 | 8 | 3 | 11 | 6 |
| Prior qtr. | 9 | 10 | 15 | 15 | 19 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 8/2005 | 55 | 51 | 53 | 66 | 60 |
| Prior qtr. | 64 | 61 | 61 | 62 | 68 | |
| Reason for optimism | ||||||
| % Sales prospects | 8/2005 | 41 | 49 | 43 | 43 | 49 |
| Prior qtr. | 41 | 46 | 46 | 42 | 44 | |
| % Lower costs | 8/2005 | 1 | 3 | 2 | 4 | 2 |
| Prior qtr. | 3 | 5 | 2 | 2 | 2 | |
| % Price increases | 8/2005 | 2 | 1 | 3 | 3 | 3 |
| Prior qtr. | 5 | 4 | 5 | 5 | 5 | |
| % Greater productivity | 8/2005 | 17 | 16 | 14 | 11 | 11 |
| Prior qtr. | 14 | 12 | 13 | 16 | 14 | |
| % Government policy | 8/2005 | 2 | 2 | 2 | 6 | 2 |
| Prior qtr. | 4 | 5 | 3 | 4 | 4 | |
| % Seasonal Weather | 8/2005 | 9 | 11 | 14 | 11 | 10 |
| Prior qtr. | - | - | - | - | - | |
| Reason for pessimism | ||||||
| % Sales prospects | 8/2005 | IC* | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Cost increases | 8/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Pressure on selling prices | 8/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Lower productivity | 8/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Government policies | 8/2005 | 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" | 8/2005 | 43 | 39 | 44 | 46 | 42 |
| Prior qtr. | 55 | 34 | 39 | 45 | 43 | |
| Profits | ||||||
| Net % profits "good" | 8/2005 | 25 | 22 | 18 | 26 | 22 |
| Prior qtr. | 33 | 15 | 23 | 24 | 23 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 8/2005 | 18 | 18 | 23 | 20 | 24 |
| Prior qtr. | 16 | 19 | 16 | 19 | 20 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 8/2005 | 18 | 17 | 21 | 13 | 20 |
| Prior qtr. | 16 | 11 | 17 | 16 | 12 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 8/2005 | 56 | 51 | 55 | 58 | 49 |
| Prior qtr. | 58 | 51 | 51 | 54 | 53 | |
| % Benefits | 8/2005 | 28 | 34 | 30 | 24 | 35 |
| Prior qtr. | 24 | 29 | 30 | 26 | 33 | |
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 8/2005 | 38 | 45 | 45 | 42 | 41 |
| Prior qtr. | 33 | 44 | 47 | 46 | 41 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 43 | 43 | 46 | 40 | 45 |
| Prior qtr. | 36 | 43 | 46 | 43 | 41 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 40 | 39 | 42 | 38 | 44 |
| Prior qtr. | 33 | 40 | 41 | 35 | 36 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 8/2005 | 52 | 54 | 55 | 54 | 54 |
| Prior qtr. | 53 | 56 | 53 | 49 | 56 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 8/2005 | 41 | 40 | 41 | 39 | 43 |
| Prior qtr. | 41 | 41 | 43 | 41 | 41 | |
| % All credit needs not satisfied | 8/2005 | 6 | 5 | 6 | 6 | 6 |
| Prior qtr. | 4 | 6 | 5 | 5 | 6 | |
| % No credit needs | 8/2005 | 47 | 49 | 47 | 47 | 48 |
| Prior qtr. | 49 | 46 | 43 | 45 | 46 | |
| Iowa | Ill. | Minn. | Mo. | Wis. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 8/2005 | 59 | 51 | 59 | 58 | 63 |
| Prior qtr. | 58 | 47 | 56 | 53 | 54 | |
| Selling prices (last three months) | ||||||
| Net % increased | 8/2005 | 15 | 14 | 16 | 18 | 22 |
| Prior qtr. | 22 | 17 | 19 | 20 | 20 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 8/2005 | 9 | 9 | 10 | 13 | 9 |
| Prior qtr. | 9 | 9 | 9 | 11 | 8 | |
| Single most important business problem | ||||||
| % Weak sales | 8/2005 | 9 | 9 | 14 | 9 | 11 |
| Prior qtr. | 9 | 13 | 13 | 12 | 10 | |
| % Taxes | 8/2005 | 10 | 13 | 9 | 9 | 12 |
| Prior qtr. | 11 | 15 | 11 | 12 | 15 | |
| % Employee quality/costs | 8/2005 | 8 | 8 | 9 | 12 | 9 |
| Prior qtr. | 7 | 6 | 7 | 7 | 6 | |
| % Insurance | 8/2005 | 20 | 14 | 17 | 20 | 20 |
| Prior qtr. | 19 | 17 | 18 | 19 | 23 | |
| % Big-business competition | 8/2005 | 18 | 15 | 13 | 13 | 13 |
| Prior qtr. | 12 | 14 | 14 | 12 | 15 | |
| % Inflation/Rising prices | 8/2005 | 11 | 11 | 14 | 13 | 12 |
| Prior qtr. | 19 | 13 | 14 | 13 | 13 | |
| % Credit availability/Interest rates | 8/2005 | 2 | 3 | 3 | 4 | 1 |
| Prior qtr. | 4 | 3 | 3 | 3 | 3 | |
| % Regulations/Red tape | 8/2005 | 9 | 9 | 6 | 6 | 8 |
| Prior qtr. | 7 | 8 | 7 | 8 | 4 | |
*Insufficient cases
| Iowa Quarterly Spotlight | |
|
How important is immigrant labor to businesses in | |
| Very important | 8% |
| Somewhat important | 25% |
| Not too important | 23% |
| Not at all important | 37% |
| Don't know/Refused | 8% |
| Total | 100% |
| Which best describes the role immigrant labor plays in your area? | |
| Provides skills not otherwise available | 4% |
| Fills jobs that wouldn't otherwise be filled | 23% |
| Crowds out American workers | 12% |
| No appreciable role | 38% |
| Don't know/Refused | 23% |
| 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.
