Release Date: 12/ 01/ 2005
CONTACT: Ellen Valentino, (410) 267-0335 or Jim Jennings, (240) 645-4099
Two out of five business owners report serious impact of higher energy costs
ANNAPOLIS, Md. -- Maryland small-business owners say business conditions in the state and their individual market are good, according to the Maryland Small-Business ConditionsSM. Maryland's business owners offered one of the nation's most positive assessments of their market, placing second among the 26 states measured. The report's data, which was released today by the National Federation of Independent Business/Maryland, provides an overview of small-business conditions within Maryland and compares them with neighboring states.
Maryland's business owners reported the outlook for the next three months remains strong with a net 66 percent indicating their business outlook to be "good"—the second highest rating among the 26 states participating in the Small-Business ConditionsSM surveys. Virginia came in third at 53 percent and Pennsylvania came in 21st with 25 percent reporting a good outlook.
Other positive news came from Maryland small-business owners. A net 52 percent reported sales as "good"—up from the third quarter's 49 percent, and 39 percent indicated profits were up as well, up from last quarter's 33 percent.
The single most important business problem continues to be the cost of insurance, followed by employee costs/quality and inflation and rising prices. "We have stated day in and day out that the cost of health insurance is the top problem facing small businesses today. Lawmakers need to remember this fact when they return to Annapolis next month. They must uphold the governor's veto of the mandated health insurance legislation and look for real solutions" said Ellen Valentino, NFIB/Maryland's state director.
The survey also found that energy prices are rising and having a negative impact on small business. Two out of five business owners said the higher energy costs were having a "seriously negative" impact on their business, while 48 percent said the high costs were having a slight or somewhat negative impact.
| 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 | 11/2005 | 25 | 7 | 32 | ||
| Prior qtr. | 21 | 10 | 41 | |||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 56 | 25 | 53 | ||
| Prior qtr. | 53 | 30 | 62 | |||
| Net % "improving" | 11/2005 | 15 | -1 | 18 | ||
| Prior qtr. | 16 | 1 | 27 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 66 | 46 | 61 | ||
| Prior qtr. | 65 | 52 | 73 | |||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 57 | 45 | 56 | ||
| Prior qtr. | 43 | 41 | 49 | |||
| % Lower costs | 11/2005 | 4 | 5 | 4 | ||
| Prior qtr. | 5 | 4 | 2 | |||
| % Price increases | 11/2005 | 3 | 6 | 3 | ||
| Prior qtr. | 5 | 5 | 2 | |||
| % Greater productivity | 11/2005 | 13 | 11 | 14 | ||
| Prior qtr. | 14 | 12 | 9 | |||
| % Government policy | 11/2005 | 2 | 5 | 4 | ||
| Prior qtr. | 5 | 3 | 5 | |||
| % Seasonal/Weather | 11/2005 | 5 | 12 | 9 | ||
| Prior qtr. | 8 | 9 | 10 | |||
| 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 | |||
| Md. | Pa. | Va. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 52 | 37 | 53 | ||
| Prior qtr. | 49 | 43 | 56 | |||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 39 | 17 | 33 | ||
| Prior qtr. | 33 | 22 | 37 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 25 | 18 | 22 | ||
| Prior qtr. | 22 | 21 | 26 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 22 | 17 | 10 | ||
| Prior qtr. | 17 | 21 | 19 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 56 | 42 | 57 | ||
| Prior qtr. | 53 | 44 | 58 | |||
| % Benefits | 11/2005 | 29 | 36 | 26 | ||
| Prior qtr. | 27 | 36 | 27 | |||
| Md. | Pa. | Va. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 46 | 41 | 45 | ||
| Prior qtr. | 45 | 38 | 43 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 47 | 47 | 41 | ||
| Prior qtr. | 40 | 38 | 41 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 46 | 40 | 42 | ||
| Prior qtr. | 42 | 38 | 39 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 60 | 52 | 51 | ||
| Prior qtr. | 51 | 49 | 47 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 42 | 37 | 42 | ||
| Prior qtr. | 37 | 37 | 37 | |||
| % All credit needs not satisfied | 11/2005 | 5 | 8 | 8 | ||
| Prior qtr. | 6 | 4 | 7 | |||
| % No credit needs | 11/2005 | 47 | 49 | 46 | ||
| Prior qtr. | 49 | 52 | 50 | |||
| Md. | Pa. | Va. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 55 | 63 | 58 | ||
| Prior qtr. | 49 | 59 | 56 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 25 | 20 | 22 | ||
| Prior qtr. | 18 | 18 | 18 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 12 | 7 | 7 | ||
| Prior qtr. | 12 | 10 | 13 | |||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 7 | 9 | 10 | ||
| Prior qtr. | 7 | 9 | 8 | |||
| % Taxes | 11/2005 | 10 | 11 | 12 | ||
| Prior qtr. | 9 | 15 | 11 | |||
| % Employee quality/costs | 11/2005 | 15 | 8 | 11 | ||
| Prior qtr. | 12 | 7 | 13 | |||
| % Insurance | 11/2005 | 16 | 17 | 12 | ||
| Prior qtr. | 16 | 18 | 12 | |||
| % Big-business competition | 11/2005 | 14 | 15 | 14 | ||
| Prior qtr. | 14 | 14 | 17 | |||
| % Inflation/Rising prices | 11/2005 | 13 | 14 | 16 | ||
| Prior qtr. | 11 | 13 | 15 | |||
| % Credit availability/Interest rates | 11/2005 | 4 | 3 | 3 | ||
| Prior qtr. | 4 | 3 | 3 | |||
| % Regulations/Red tape | 11/2005 | 7 | 9 | 7 | ||
| Prior qtr. | 6 | 7 | 6 | |||
| Maryland Quarterly Spotlight | |
| What has been the impact on your business of the recent run-up in energy prices? | |
| Seriously negative | 21% |
| Somewhat negative | 21% |
| Slightly negative | 27% |
| No impact | 23% |
| 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 | 19% |
| Invested in energy-conserving equipment or vehicles | 6% |
| Reduced energy use | 25% |
| Absorbed costs with lower earnings | 17% |
| Reduced non-energy costs such as payroll | 5% |
| Other | 11% |
| Don't know/Refused | 18% |
| 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.
