Release Date: 06/ 01/ 2005
CONTACT: Ellen Valentino, (410) 267-0335 or Jim Jennings, (240) 645-4099
Overall Business Conditions Outlook Takes a Drop But Still Remains Strong
ANNAPOLIS, June 1, 2005—Maryland’s small-business community is feeling pretty good about itself but there was a significant ripple in the second quarter Small-Business ConditionsSM economic survey.
Nearly two-thirds of those surveyed said business conditions in their market were either good or very good, and eight percent report conditions as bad, for a net positive reaction of 53, a 12 percent drop from last quarter, and the largest drop in the region. However, Maryland small-business owners feel better about business conditions in their market area than business owners in Pennsylvania, 30 percent and Virginia, 48 percent.
The report’s data, released today by the NFIB/Maryland, provides an overview of small-business conditions within Maryland and compares them with neighboring states.
Sales and earnings outlooks dropped significantly. Of those surveyed, a net 27 percent indicated that profits were good, a 19 percentage point drop from February’s report, and a net 44 percent characterized sales as good, down 14 percent. Overall, a net 47 percent of small-business owners reported that over the last three months their purchasing prices rose, while a net 21 percent reported they had increased selling prices. Both are unchanged percentages from February.
“Policy makers should take note of the percentage drop in business conditions and in the sales and earning outlook—there could be a significant trend developing,” said Ellen Valentino, NFIB/Maryland state director.
“It is possible that the wide media coverage of the minimum wage increase and the payroll tax legislation may be reflected in this second quarter survey. The next few quarters will be interesting to watch and evaluate.”
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.
| Maryland Small-Business ConditionsSM | ||||||
| This chart shows the results from Maryland and its comparative standing among selected nearby states. | ||||||
| Md. | Pa. | Va. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 26 | 22 | 32 | ||
| Prior qtr. | 31 | 23 | 35 | |||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 53 | 30 | 48 | ||
| Prior qtr. | 65 | 29 | 53 | |||
| Net % "improving" | 5/2005 | 18 | 0 | 20 | ||
| Prior qtr. | 25 | 15 | 24 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 67 | 43 | 69 | ||
| Prior qtr. | 77 | 63 | 71 | |||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 40 | 37 | 42 | ||
| Prior qtr. | 47 | 39 | 43 | |||
| % Lower costs | 5/2005 | 4 | 1 | 4 | ||
| Prior qtr. | 3 | 2 | 5 | |||
| % Price increases | 5/2005 | 5 | 4 | 3 | ||
| Prior qtr. | 4 | 3 | 5 | |||
| % Greater productivity | 5/2005 | 16 | 18 | 15 | ||
| Prior qtr. | 15 | 18 | 12 | |||
| % Government policy | 5/2005 | 5 | 4 | 4 | ||
| Prior qtr. | 7 | 4 | 7 | |||
| % Seasonal/Weather | 5/2005 | 12 | 12 | 12 | ||
| 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 | |||
| Md. | Pa. | Va. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 44 | 35 | 50 | ||
| Prior qtr. | 58 | 36 | 46 | |||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 27 | 21 | 33 | ||
| Prior qtr. | 46 | 20 | 31 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 23 | 19 | 21 | ||
| Prior qtr. | 23 | 19 | 27 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 12 | 15 | 18 | ||
| Prior qtr. | 16 | 16 | 14 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 59 | 51 | 61 | ||
| Prior qtr. | 54 | 45 | 61 | |||
| % Benefits | 5/2005 | 25 | 31 | 25 | ||
| Prior qtr. | 30 | 36 | 25 | |||
| Md. | Pa. | Va. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 43 | 43 | 41 | ||
| Prior qtr. | 49 | 40 | 42 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 36 | 42 | 43 | ||
| Prior qtr. | 44 | 41 | 36 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 42 | 40 | 37 | ||
| Prior qtr. | 44 | 35 | 41 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 49 | 52 | 51 | ||
| Prior qtr. | 57 | 57 | 52 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 45 | 43 | 43 | ||
| Prior qtr. | 40 | 37 | 43 | |||
| % All credit needs not satisfied | 5/2005 | 5 | 4 | 6 | ||
| Prior qtr. | 5 | 6 | 5 | |||
| % No credit needs | 5/2005 | 40 | 45 | 45 | ||
| Prior qtr. | 51 | 53 | 49 | |||
| Md. | Pa. | Va. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 47 | 59 | 50 | ||
| Prior qtr. | 48 | 51 | 42 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 21 | 18 | 16 | ||
| Prior qtr. | 21 | 20 | 14 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 11 | 11 | 11 | ||
| Prior qtr. | 15 | 9 | 13 | |||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 11 | 13 | 12 | ||
| Prior qtr. | 7 | 10 | 7 | |||
| % Taxes | 5/2005 | 9 | 11 | 11 | ||
| Prior qtr. | 10 | 12 | 10 | |||
| % Employee quality/costs | 5/2005 | 11 | 10 | 9 | ||
| Prior qtr. | 7 | 11 | 11 | |||
| % Insurance | 5/2005 | 13 | 19 | 12 | ||
| Prior qtr. | 15 | 18 | 15 | |||
| % Big-business competition | 5/2005 | 14 | 13 | 18 | ||
| Prior qtr. | 14 | 15 | 16 | |||
| % Inflation/Rising prices | 5/2005 | 11 | 13 | 14 | ||
| Prior qtr. | 14 | 7 | 8 | |||
| % Credit availability/Interest rates | 5/2005 | 4 | 3 | 3 | ||
| Prior qtr. | 4 | 3 | 6 | |||
| % Regulations/Red tape | 5/2005 | 11 | 7 | 6 | ||
| Prior qtr. | 13 | 10 | 9 | |||
| Maryland Quarterly Spotlight | |
| In what general area of the state budget are reductions MOST warranted? | |
| Education | 12% |
| Transportation and roads | 10% |
| Economic development | 12% |
| Health | 11% |
| Public welfare | 10% |
| Police and corrections | 3% |
| Other | 7% |
| Don't know/Refused | 34% |
| Total | 100% |
| What type of tax increase would have the most adverse effect on your business? | |
| Payroll taxes | 25% |
| Corporate income or franchise taxes | 9% |
| Real property taxes | 6% |
| Sales taxes | 11% |
| Personal income taxes | 13% |
| Personal property, including inventory taxes |
11% |
| Other | 2% |
| Any/All | 2% |
| Don't know/Refused | 19% |
| Total | 100% |
The Poll
NFIB’s Maryland Small-Business ConditionsSM is a telephone survey of a random sample of Maryland 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.
