Release Date: 12/ 01/ 2005
CONTACT: Bill Vernon, (617) 482-1327 or Jim Jennings, (240) 645-4099
BOSTON, Mass. -- Massachusetts' overall business climate has started to turn downward, according to the Massachusetts Small-Business ConditionsSM. The report's data, which was released today by the National Federation of Independent Business/Massachusetts, provides an overview of small-business conditions within Massachusetts and compares them with neighboring states.
"Massachusetts' small employers are reporting a significant drop-off in their market's business conditions as compared to the third quarter, with many reporting a drop in sales and profits," said Bill Vernon, NFIB/Massachusetts state director.
A net 34 percent of the state's small employers believe business conditions in their market area are "good," a drop from the third quarter's 41 percent. But Massachusetts' business owners remain optimistic about the future as the outlook for the next three months remained steady, with a net 60 percent reporting a "good" outlook compared to last quarter's 62 percent.
Of those surveyed in Massachusetts, a net 24 percent indicated that profits were "good" — a drop from last quarter's 32 percent — and a net 39 percent of those same respondents characterized sales as "good," a drop from last quarter's 48 percent. A net 22 percent reported they had raised their selling prices — up from last quarter's 14 percent. Yet the business owners' purchasing prices remained stable although they had increased earlier in the year.
Two-thirds of the business owners surveyed reported negative impacts from rising energy costs on their businesses, with one in five saying the high energy costs had a serious negative effect on their firm.
When asked to rank their most important business problem, Massachusetts small-business owners continued to rank insurance, including health care costs, as the most serious of all conditions. Taxes, employee quality and costs, as well as rising prices, were also prominently mentioned as serious problems.
Vernon noted that the survey was taken before legislative efforts to impose a payroll tax on some firms to fund health care for the uninsured was debated.
| 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 | 11/2005 | 20 | 13 | -1 | ||
| Prior qtr. | 11 | 6 | 12 | |||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 34 | 35 | 17 | ||
| Prior qtr. | 41 | 29 | 29 | |||
| Net % "improving" | 11/2005 | 4 | 10 | -6 | ||
| Prior qtr. | 6 | 7 | 9 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 60 | 57 | 48 | ||
| Prior qtr. | 62 | 57 | 53 | |||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 49 | 46 | 40 | ||
| Prior qtr. | 45 | 47 | 47 | |||
| % Lower costs | 11/2005 | 5 | 5 | 6 | ||
| Prior qtr. | 3 | 4 | 3 | |||
| % Price increases | 11/2005 | 4 | 6 | 8 | ||
| Prior qtr. | 3 | 6 | 7 | |||
| % Greater productivity | 11/2005 | 14 | 16 | 15 | ||
| Prior qtr. | 14 | 10 | 13 | |||
| % Government policy | 11/2005 | 6 | 2 | 3 | ||
| Prior qtr. | 2 | 4 | 5 | |||
| % Seasonal/Weather | 11/2005 | 5 | 8 | 9 | ||
| Prior qtr. | 12 | 5 | 7 | |||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Mass. | Conn. | N.Y. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 39 | 43 | 34 | ||
| Prior qtr. | 48 | 38 | 42 | |||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 24 | 29 | 13 | ||
| Prior qtr. | 32 | 13 | 26 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 22 | 19 | 20 | ||
| Prior qtr. | 23 | 22 | 23 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 10 | 19 | 17 | ||
| Prior qtr. | 16 | 15 | 19 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 46 | 49 | 50 | ||
| Prior qtr. | 47 | 47 | 48 | |||
| % Benefits | 11/2005 | 35 | 27 | 30 | ||
| Prior qtr. | 35 | 35 | 29 | |||
| Mass. | Conn. | N.Y. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 40 | 41 | 48 | ||
| Prior qtr. | 41 | 41 | 46 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 37 | 41 | 46 | ||
| Prior qtr. | 41 | 41 | 46 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 36 | 43 | 44 | ||
| Prior qtr. | 38 | 34 | 43 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 53 | 53 | 55 | ||
| Prior qtr. | 52 | 58 | 55 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 35 | 39 | 40 | ||
| Prior qtr. | 40 | 31 | 32 | |||
| % All credit needs not satisfied | 11/2005 | 9 | 9 | 10 | ||
| Prior qtr. | 5 | 10 | 10 | |||
| % No credit needs | 11/2005 | 50 | 48 | 45 | ||
| Prior qtr. | 49 | 53 | 54 | |||
| Mass. | Conn. | N.Y. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 53 | 60 | 68 | ||
| Prior qtr. | 55 | 58 | 55 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 22 | 25 | 24 | ||
| Prior qtr. | 14 | 14 | 18 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 10 | 14 | 12 | ||
| Prior qtr. | 10 | 10 | 11 | |||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 10 | 9 | 10 | ||
| Prior qtr. | 9 | 9 | 11 | |||
| % Taxes | 11/2005 | 12 | 11 | 15 | ||
| Prior qtr. | 8 | 16 | 15 | |||
| % Employee quality/costs | 11/2005 | 10 | 11 | 9 | ||
| Prior qtr. | 11 | 7 | 7 | |||
| % Insurance | 11/2005 | 17 | 17 | 16 | ||
| Prior qtr. | 19 | 17 | 15 | |||
| % Big-business competition | 11/2005 | 12 | 14 | 10 | ||
| Prior qtr. | 13 | 14 | 13 | |||
| % Inflation/Rising prices | 11/2005 | 15 | 14 | 12 | ||
| Prior qtr. | 15 | 12 | 10 | |||
| % Credit availability/Interest rates | 11/2005 | 5 | 4 | 3 | ||
| Prior qtr. | 4 | 3 | 3 | |||
| % Regulations/Red tape | 11/2005 | 5 | 6 | 8 | ||
| Prior qtr. | 6 | 8 | 8 | |||
| Massachusetts Quarterly Spotlight | |
| What has been the impact on your business of the recent run-up in energy prices? | |
| Seriously negative | 19% |
| Somewhat negative | 20% |
| Slightly negative | 26% |
| No impact | 26% |
| No impact | 3% |
| Positive | 3% |
| Don't know | 4% |
| Refused | 2% |
| Total | 100% |
| What is the single most important action you have recently taken to offset rising energy costs? | |
| Raised selling prices | 15% |
| Invested in energy-conserving equipment or vehicles | 8% |
| Reduced energy use | 24% |
| Absorbed costs with lower earnings | 14% |
| Reduced non-energy costs such as payroll | 7% |
| Other | 10% |
| Don't know/Refused | 22% |
| 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.
