Release Date: 06/ 01/ 2005
CONTACT: Bill Vernon, (617) 482-1327 or Jim Jennings, (240) 645-4099
Need for Job-Development Skill Training Cited as Top Concern
BOSTON, June 1, 2005—Massachusetts’ small-business owners are optimistic about the state’s business climate, and they believe that business conditions in their area—while currently just okay—are slowly improving, according to the new Small Business ConditionsSM report.
A net 33 percent (percentage positive minus percentage negative) said business conditions currently were good (percent good minus percent poor) and a net 12 percent said they were improving. The second-quarter report found that prices for goods and services are the same as in the first quarter. Payroll costs were also steady but remain the top problem facing small firms.
“While there certainly are still problems out there, small-business owners are positive about the slowly improving economy,” said Bill Vernon, NFIB/Massachusetts state director. “Hopefully, legislators will recognize this and begin passing legislation that will help further stimulate growth by removing some of the obstacles that stand in the way of job creation, such as the high cost of health and unemployment insurance.”
One specific area in which small firms would like to see state assistance is in the area of job training. When asked what they would choose if they could improve one area in their workforce, 25 percent said the development of job-specific skills, followed by people skills and work ethic.
Small-business owners are also hanging onto their money, with more than half saying they have not invested in new equipment, vehicles or technology upgrades. Likewise, hiring is slow, with four out of five saying they have zero job openings.
Nearly half of those surveyed said they believed their business prospects over the next several months look to be improving. Most cited sales prospects as the top reason for optimism.
On the down side, however, cost increases and government policies on taxes and regulations tend to dampen their enthusiasm.
“On an individual basis, it seems the small-business owners have a pretty promising outlook, but when they start thinking about government regulations and the costs of job creation—including legislative efforts to raise the minimum wage—they become less enthusiastic,” said Vernon.
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.
| Massachusetts Small-Business ConditionsSM | ||||||
| This chart shows the results from Massachusetts and its comparative standing among selected nearby states. | ||||||
| Mass. | Conn. | N.Y. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 15 | 7 | 0 | ||
| Prior qtr. | 13 | 14 | 3 | |||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 33 | 39 | 22 | ||
| Prior qtr. | 33 | 33 | 17 | |||
| Net % "improving" | 5/2005 | 12 | 8 | 0 | ||
| Prior qtr. | 12 | 13 | 7 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 60 | 60 | 47 | ||
| Prior qtr. | 62 | 67 | 56 | |||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 41 | 47 | 48 | ||
| Prior qtr. | 47 | 56 | 63 | |||
| % Lower costs | 5/2005 | 6 | 2 | 4 | ||
| Prior qtr. | 4 | 2 | 2 | |||
| % Price increases | 5/2005 | 4 | 7 | 3 | ||
| Prior qtr. | 3 | 3 | 4 | |||
| % Greater productivity | 5/2005 | 10 | 19 | 13 | ||
| Prior qtr. | 16 | 11 | 10 | |||
| % Government policy | 5/2005 | 2 | 4 | 4 | ||
| Prior qtr. | 3 | 3 | 2 | |||
| % Seasonal/Weather | 5/2005 | 13 | 7 | 8 | ||
| Prior qtr. | - | - | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Mass. | Conn. | N.Y. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 39 | 47 | 31 | ||
| Prior qtr. | 35 | 40 | 25 | |||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 26 | 29 | 10 | ||
| Prior qtr. | 18 | 18 | 12 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 17 | 16 | 21 | ||
| Prior qtr. | 19 | 22 | 22 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 15 | 15 | 16 | ||
| Prior qtr. | 17 | 22 | 29 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 51 | 46 | 45 | ||
| Prior qtr. | 53 | 50 | 56 | |||
| % Benefits | 5/2005 | 23 | 28 | 31 | ||
| Prior qtr. | 33 | 32 | 28 | |||
| Mass. | Conn. | N.Y. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 42 | 41 | 41 | ||
| Prior qtr. | 41 | 47 | 47 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 39 | 40 | ||
| Prior qtr. | 42 | 43 | 45 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 35 | 34 | 35 | ||
| Prior qtr. | 37 | 45 | 42 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 51 | 47 | 45 | ||
| Prior qtr. | 61 | 63 | 54 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 36 | 46 | 35 | ||
| Prior qtr. | 35 | 41 | 34 | |||
| % All credit needs not satisfied | 5/2005 | 7 | 3 | 6 | ||
| Prior qtr. | 9 | 8 | 12 | |||
| % No credit needs | 5/2005 | 51 | 45 | 50 | ||
| Prior qtr. | 51 | 47 | 47 | |||
| Mass. | Conn. | N.Y. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 50 | 52 | 54 | ||
| Prior qtr. | 48 | 60 | 56 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 18 | 15 | 14 | ||
| Prior qtr. | 17 | 22 | 16 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 9 | 10 | 11 | ||
| Prior qtr. | 11 | 13 | 17 | |||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 13 | 14 | 11 | ||
| Prior qtr. | 10 | 9 | 11 | |||
| % Taxes | 5/2005 | 10 | 12 | 11 | ||
| Prior qtr. | 9 | 11 | 16 | |||
| % Employee quality/costs | 5/2005 | 9 | 9 | 8 | ||
| Prior qtr. | 10 | 14 | 9 | |||
| % Insurance | 5/2005 | 17 | 19 | 16 | ||
| Prior qtr. | 22 | 21 | 17 | |||
| % Big-business competition | 5/2005 | 14 | 11 | 14 | ||
| Prior qtr. | 17 | 15 | 14 | |||
| % Inflation/Rising prices | 5/2005 | 11 | 12 | 10 | ||
| Prior qtr. | 11 | 5 | 11 | |||
| % Credit availability/Interest rates | 5/2005 | 3 | 3 | 1 | ||
| Prior qtr. | 2 | 2 | 5 | |||
| % Regulations/Red tape | 5/2005 | 7 | 7 | 7 | ||
| Prior qtr. | 9 | 9 | 7 | |||
| Massachusetts Quarterly Spotlight | |
| What type of tax increase would have the most adverse effect on your business? | |
| Payroll taxes | 24% |
| Corporate income or franchise taxes | 15% |
| Real property taxes | 5% |
| Sales taxes | 9% |
| Personal income taxes | 11% |
| Personal property taxes | 10% |
| Other | 2% |
| Don't know/Refused | 24% |
| Total | 100% |
| If you could improve your workforce in just ONE area, what would that be? | |
| People skills | 26% |
| Job-specific skills | 26% |
| Work ethic | 19% |
| Basic literacy and math | 3% |
| English proficiency | 4% |
| Other | 3% |
| Satisfied/Can't improve | 2% |
| Don't know/Refused | 18% |
| Total | 100% |
The Poll
NFIB’s Massachusetts Small-Business ConditionsSM is a telephone survey of a random sample of Massachusetts 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.
