Release Date: 06/ 01/ 2005
CONTACT: Kim Maisch, (217) 523-5471 or Kevin Walter, (614) 221-4107
Business Environment Continues to Cause Pessimism
SPRINGFIELD, June 1, 2005 – Illinois’ overall business climate continues to deflate small-business owners’ optimism and their bottom lines according to the Illinois Small-Business ConditionsSM report. The report’s data, which was released today by the National Federation of Independent Business /Illinois, provides an overview of small-business conditions within Illinois and compares them with neighboring states.
“Not only has Illinois failed to turn the corner economically, the underlying perception is that the business environment continues to be a detriment to economic growth and survival,” said Kim Clarke Maisch, NFIB/Illinois state director. “While small-business owners in our neighboring states continue to feel good about the direction they are heading, Illinois small-business owners can’t seem to shake this feeling of doom and gloom. Their angst seems to be a result of the ongoing-negative climate related to the Governor and legislature’s policies.”
Only a net 6 percent of the state’s small employers believe the business environment in Illinois is supportive. This attitude had only grown worse in the second quarter and compares to a net 16 percent last February. In neighboring Indiana, a net 32 percent found their business environment supportive.
“Of the 26 states surveyed, Illinois ranks in the lowest quarter on virtually every important measure,” said Maisch. A net 30 percent of Illinois small-business owners believed current business conditions are good. However, 45 percent of Iowa owners, 43 percent of Missouri owners and 40 percent of Wisconsin owners assessed their state as good. Arizona’s net 60 percent lead the country. Sales and earnings were also comparatively low in Illinois.
A net 10 percent said business conditions were improving, another comparatively poor state assessment. Despite the generally unfavorable evaluation of Illinois business conditions, 61 percent believed the prospects for their individual situation were positive. Optimism over sales prospects and greater firm productivity were the most frequently cited reason.
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.
| Illinois Small-Business ConditionsSM | ||||||
| This chart shows the results from Illinois and its comparative standing among selected nearby states. | ||||||
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 6 | 32 | 34 | 29 | 31 |
| Prior qtr. | 16 | 21 | 33 | 30 | 22 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 30 | 31 | 45 | 43 | 40 |
| Prior qtr. | 29 | 31 | 37 | 43 | 33 | |
| Net % "improving" | 5/2005 | 10 | 12 | 9 | 15 | 19 |
| Prior qtr. | 14 | 15 | 15 | 21 | 10 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 61 | 52 | 64 | 62 | 68 |
| Prior qtr. | 59 | 63 | 61 | 70 | 66 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 46 | 47 | 41 | 42 | 44 |
| Prior qtr. | 43 | 55 | 42 | 50 | 59 | |
| % Lower costs | 5/2005 | 5 | 2 | 3 | 2 | 2 |
| Prior qtr. | 3 | 3 | 3 | 2 | 1 | |
| % Price increases | 5/2005 | 4 | 3 | 5 | 5 | 5 |
| Prior qtr. | 3 | 2 | 4 | 4 | 5 | |
| % Greater productivity | 5/2005 | 12 | 12 | 14 | 16 | 14 |
| Prior qtr. | 13 | 17 | 16 | 15 | 12 | |
| % Government policy | 5/2005 | 5 | 4 | 4 | 4 | 4 |
| Prior qtr. | 5 | 2 | 5 | 5 | 3 | |
| % Seasonal/Weather | 5/2005 | 7 | 13 | 18 | 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 | |
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 34 | 35 | 55 | 45 | 43 |
| Prior qtr. | 22 | 28 | 44 | 39 | 37 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 15 | 19 | 33 | 24 | 23 |
| Prior qtr. | 9 | 7 | 29 | 23 | 20 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 19 | 16 | 16 | 19 | 20 |
| Prior qtr. | 18 | 20 | 15 | 17 | 19 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 11 | 14 | 16 | 16 | 12 |
| Prior qtr. | 20 | 17 | 13 | 25 | 23 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 51 | 55 | 58 | 54 | 53 |
| Prior qtr. | 53 | 52 | 55 | 59 | 52 | |
| % Benefits | 5/2005 | 29 | 30 | 24 | 26 | 33 |
| Prior qtr. | 30 | 33 | 26 | 29 | 35 | |
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 44 | 38 | 33 | 46 | 41 |
| Prior qtr. | 43 | 40 | 41 | 39 | 46 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 43 | 38 | 36 | 43 | 41 |
| Prior qtr. | 42 | 42 | 46 | 44 | 55 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 40 | 35 | 33 | 35 | 36 |
| Prior qtr. | 43 | 36 | 37 | 38 | 43 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 56 | 57 | 53 | 49 | 56 |
| Prior qtr. | 59 | 60 | 51 | 55 | 48 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 41 | 38 | 41 | 41 | 41 |
| Prior qtr. | 36 | 37 | 47 | 38 | 45 | |
| % All credit needs not satisfied | 5/2005 | 6 | 6 | 4 | 5 | 6 |
| Prior qtr. | 8 | 11 | 5 | 6 | 8 | |
| % No credit needs | 5/2005 | 46 | 50 | 49 | 45 | 46 |
| Prior qtr. | 52 | 48 | 43 | 53 | 43 | |
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 47 | 57 | 58 | 53 | 54 |
| Prior qtr. | 55 | 58 | 50 | 54 | 58 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 17 | 17 | 22 | 20 | 20 |
| Prior qtr. | 18 | 16 | 14 | 21 | 15 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 9 | 12 | 9 | 11 | 8 |
| Prior qtr. | 15 | 12 | 10 | 12 | 9 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 13 | 9 | 9 | 12 | 10 |
| Prior qtr. | 10 | 11 | 8 | 7 | 9 | |
| % Taxes | 5/2005 | 15 | 15 | 11 | 12 | 15 |
| Prior qtr. | 7 | 13 | 9 | 14 | 12 | |
| % Employee quality/costs | 5/2005 | 6 | 4 | 7 | 7 | 6 |
| Prior qtr. | 8 | 11 | 8 | 10 | 9 | |
| % Insurance | 5/2005 | 17 | 18 | 19 | 19 | 23 |
| Prior qtr. | 21 | 16 | 19 | 17 | 25 | |
| % Big-business competition | 5/2005 | 14 | 15 | 12 | 12 | 15 |
| Prior qtr. | 11 | 15 | 17 | 12 | 14 | |
| % Inflation/Rising prices | 5/2005 | 13 | 13 | 19 | 13 | 13 |
| Prior qtr. | 16 | 12 | 10 | 12 | 14 | |
| % Credit availability/Interest rates | 5/2005 | 3 | 4 | 4 | 3 | 3 |
| Prior qtr. | 3 | 5 | 1 | 4 | 3 | |
| % Regulations/Red tape | 5/2005 | 8 | 8 | 7 | 8 | 4 |
| Prior qtr. | 9 | 7 | 11 | 9 | 7 | |
| Illinois Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Illinois is headed? | |
| Very satisfied | 6% |
| Somewhat satisfied | 47% |
| Not too satisfied | 23% |
| Not at all satisfied | 15% |
| Don't know/Refused | 9% |
| Total | 100% |
| Which type of tax increase would have the most adverse effect on your business? | |
| Payroll taxes | 22% |
| Corporate income or franchise taxes | 12% |
| Real property taxes | 11% |
| Sales taxes | 11% |
| Personal income taxes | 14% |
| Personal property, including inventory, taxes |
11% |
| All/Any | 2% |
| Other | 1% |
| Don't know/Refused | 16% |
| Total | 100% |
The Poll
NFIB’s Illinois Small-Business ConditionsSM is a telephone survey of a random sample of Illinois 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.
