Release Date: 12/ 01/ 2005
CONTACT: Kim Maisch, (217) 523-5471 or Michael Diegel, (202) 554-9000
Illinois Struggles to Compete with Midwest Neighbors
SPRINGFIELD, Ill. -- Illinois small-business owners are being negatively impacted by increases in energy costs and what they see as a general trend of rising prices, according to the Illinois Small-Business ConditionsSM. 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.
"Illinois is being hurt by the nationwide trend toward higher energy prices, which are now working their way into the cost of all goods and services," said Kim Clarke Maisch, state director for NFIB/Illinois. "However, more disturbing is the inability of Illinois and our economy to compete with our neighboring states. What is causing the small-business owners in Illinois to feel less positive about the business environment than their peers in Indiana, Iowa, Missouri and Wisconsin? The governor and lawmakers must take a long, hard look at their economic policies and have an honest discussion with employers in this state on how we can turn things around."
When asked how they felt about the overall business environment, a net of just 12 percent of Illinois employers said it was "supportive," compared with a net 20 in Indiana, a net 37 in Iowa, a net 31 in Missouri and a net 23 percent in Wisconsin.
The recent run-up in energy prices has had an overwhelmingly negative impact on Illinois small business, with 68 percent of respondents saying it had a detrimental effect on their business. Twenty-nine percent report that they are coping with the increase by reducing energy use, while 19 percent are absorbing those costs through lower earnings.
Small-business owners also have responded with energy conservation measures, and remain optimistic despite purchase prices rising faster than selling prices. A net 51 percent (percent positive minus percent negative) believe the outlook for business is "good" for the next three months, and a net 47 percent are optimistic regarding sales prospects.
| 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 | 11/2005 | 12 | 20 | 37 | 31 | 23 |
| Prior qtr. | 18 | 28 | 32 | 28 | 17 | |
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 24 | 23 | 40 | 45 | 35 |
| Prior qtr. | 31 | 29 | 41 | 44 | 36 | |
| Net % "improving" | 11/2005 | 0 | -4 | 4 | 5 | 4 |
| Prior qtr. | 8 | 9 | 5 | 11 | 6 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 51 | 50 | 57 | 59 | 51 |
| Prior qtr. | 51 | 56 | 55 | 66 | 60 | |
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 47 | 45 | 42 | 49 | 45 |
| Prior qtr. | 49 | 45 | 41 | 43 | 49 | |
| % Lower costs | 11/2005 | 4 | 4 | 6 | 4 | 7 |
| Prior qtr. | 3 | 4 | 1 | 4 | 2 | |
| % Price increases | 11/2005 | 2 | 3 | 4 | 4 | 5 |
| Prior qtr. | 1 | 5 | 2 | 3 | 3 | |
| % Greater productivity | 11/2005 | 16 | 17 | 16 | 14 | 14 |
| Prior qtr. | 16 | 12 | 17 | 12 | 11 | |
| % Government policy | 11/2005 | 3 | 4 | 5 | 4 | 6 |
| Prior qtr. | 2 | 5 | 2 | 6 | 2 | |
| % Seasonal/Weather | 11/2005 | 12 | 8 | 13 | 8 | 10 |
| Prior qtr. | 11 | 8 | 9 | 11 | 10 | |
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Cost increases | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Pressure on selling prices | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Lower productivity | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Government policies | 11/2005 | 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" | 11/2005 | 36 | 33 | 43 | 43 | 41 |
| Prior qtr. | 39 | 37 | 43 | 46 | 42 | |
| Profits | ||||||
| Net % profits "good" | 11/2005 | 16 | 16 | 26 | 24 | 22 |
| Prior qtr. | 22 | 14 | 25 | 27 | 22 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 17 | 16 | 21 | 21 | 21 |
| Prior qtr. | 18 | 19 | 18 | 20 | 24 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 14 | 16 | 16 | 19 | 19 |
| Prior qtr. | 17 | 12 | 18 | 13 | 20 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 51 | 54 | 57 | 52 | 55 |
| Prior qtr. | 51 | 57 | 56 | 58 | 49 | |
| % Benefits | 11/2005 | 31 | 26 | 26 | 33 | 33 |
| Prior qtr. | 34 | 26 | 28 | 24 | 35 | |
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 44 | 43 | 40 | 46 | 45 |
| Prior qtr. | 45 | 41 | 38 | 42 | 41 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 44 | 41 | 44 | 45 | 44 |
| Prior qtr. | 43 | 42 | 43 | 40 | 45 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 42 | 39 | 37 | 46 | 44 |
| Prior qtr. | 39 | 39 | 40 | 38 | 44 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 53 | 57 | 54 | 53 | 51 |
| Prior qtr. | 54 | 49 | 52 | 54 | 54 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 42 | 34 | 50 | 39 | 45 |
| Prior qtr. | 40 | 35 | 41 | 39 | 43 | |
| % All credit needs not satisfied | 11/2005 | 5 | 7 | 7 | 5 | 9 |
| Prior qtr. | 5 | 5 | 6 | 6 | 6 | |
| % No credit needs | 11/2005 | 49 | 53 | 39 | 53 | 42 |
| Prior qtr. | 49 | 53 | 47 | 47 | 48 | |
| Ill. | Ind. | Iowa | Mo. | Wis. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 62 | 63 | 69 | 63 | 63 |
| Prior qtr. | 51 | 55 | 59 | 58 | 63 | |
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 20 | 15 | 23 | 21 | 21 |
| Prior qtr. | 14 | 16 | 15 | 18 | 22 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 13 | 9 | 11 | 11 | 11 |
| Prior qtr. | 9 | 8 | 9 | 13 | 9 | |
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 12 | 10 | 8 | 9 | 10 |
| Prior qtr. | 9 | 11 | 9 | 9 | 11 | |
| % Taxes | 11/2005 | 10 | 15 | 11 | 9 | 9 |
| Prior qtr. | 13 | 15 | 10 | 9 | 12 | |
| % Employee quality/costs | 11/2005 | 9 | 7 | 9 | 13 | 8 |
| Prior qtr. | 8 | 9 | 8 | 12 | 9 | |
| % Insurance | 11/2005 | 16 | 16 | 19 | 16 | 23 |
| Prior qtr. | 14 | 16 | 20 | 20 | 20 | |
| % Big-business competition | 11/2005 | 12 | 11 | 14 | 16 | 17 |
| Prior qtr. | 15 | 13 | 18 | 13 | 13 | |
| % Inflation/Rising prices | 11/2005 | 16 | 16 | 15 | 14 | 14 |
| Prior qtr. | 11 | 13 | 11 | 13 | 12 | |
| % Credit availability/Interest rates | 11/2005 | 3 | 3 | 3 | 3 | 1 |
| Prior qtr. | 3 | 2 | 2 | 4 | 1 | |
| % Regulations/Red tape | 11/2005 | 7 | 6 | 8 | 9 | 7 |
| Prior qtr. | 9 | 6 | 9 | 6 | 8 | |
| Illinois Quarterly Spotlight | |
| What has been the impact on your business of the recent run-up in energy prices? | |
| Seriously negative | 19% |
| Somewhat negative | 24% |
| Slightly negative | 25% |
| No impact | 26% |
| Positive | 3% |
| Don't know/Refused | 4% |
| Total | 100% |
| What is the single most important action you have recently taken to offset rising energy costs? | |
| Raised selling prices | 11% |
| Invested in energy-conserving equipment or vehicles | 9% |
| Reduced energy use | 29% |
| Absorbed costs with lower earnings | 19% |
| Reduced non-energy costs such as payroll | 6% |
| Other | 11% |
| Don't know/Refused | 15% |
| 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.
