Release Date: 03/ 01/ 2005
CONTACT: Charles Owens, (517) 485-3409 or Kevin Walter, (614) 221-4107
New survey finds state on wrong path relative to surrounding states
MICHIGAN -- Michigan's overall small-business environment and outlook does not paint a rosy picture according to the inaugural Michigan Small-Business ConditionsSM report. The new report's data, which was released today by the National Federation of Independent Business/Michigan, provides an overview of small-business conditions within Michigan and compares them with neighboring and other large population states.
"Various sources have produced numerous rankings and surveys of Michigan's business climate relative to other states, but this is the first one that specifically focuses on small-business conditions," said Charlie Owens, NFIB/Michigan State Director. "It is a wake-up call for everyone concerned about jobs and our state's economy."
Only a net 15 percent of the state's small employers (percent positive minus percent negative) believed business conditions in their market area are good while a net 16 percent characterized conditions as improving. Michigan's figures put the state last among the 26 states surveyed on business conditions, including neighboring states Ohio, Indiana and Wisconsin. A net 55 percent did say prospects for the next three months were good. Even then, the outlook of Michigan small-business owners was 13 percentage points lower than in Ohio, eight lower than in Indiana and 11 percentage points lower than in Wisconsin.
A net 2 percent indicated they were satisfied with the direction the state is headed. Michigan's satisfaction was very low compared to most other large states. For example, Texas had a net 49 percent who were satisfied and New Jersey had a net 11 percent.
"Small-business owners are tired of tax increases and tax shifts as the knee-jerk response to budget deficits," said Owens. "It's time for some tough decisions on the budget and tax policy."
The Small-Business ConditionsSM 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. For information about the Small-Business ConditionsSM project and other small-business research studies conducted by the NFIB Research Foundation, visit www.NFIB.com/research.
| Michigan Small-Business ConditionsSM | ||||||
| This chart shows the results from Michigan and its comparative standing among selected states in the region. | ||||||
| Mich. | Ind. | Ohio | Wis. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 18 | 21 | 27 | 22 | |
| Prior qtr. | - | - | - | - | ||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 15 | 31 | 34 | 33 | |
| Prior qtr. | - | - | - | - | ||
| Net % "improving" | 2/2005 | 16 | 15 | 17 | 10 | |
| Prior qtr. | - | - | - | - | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 55 | 63 | 68 | 66 | |
| Prior qtr. | - | - | - | - | ||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 45 | 55 | 39 | 59 | |
| Prior qtr. | - | - | - | - | ||
| % Lower costs | 2/2005 | 2 | 3 | 3 | 1 | |
| Prior qtr. | - | - | - | - | ||
| % Price increases | 2/2005 | 2 | 2 | 5 | 5 | |
| Prior qtr. | - | - | - | - | ||
| % Greater productivity | 2/2005 | 14 | 17 | 19 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Government policy | 2/2005 | 3 | 2 | 4 | 3 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 13 | 15 | 8 | 20 | |
| Prior qtr. | - | - | - | - | ||
| % Cost increases | 2/2005 | 9 | 5 | 0 | 10 | |
| Prior qtr. | - | - | - | - | ||
| % Pressure on selling prices | 2/2005 | 4 | 0 | 8 | 10 | |
| Prior qtr. | - | - | - | - | ||
| % Lower productivity | 2/2005 | 9 | 10 | 0 | 5 | |
| Prior qtr. | - | - | - | - | ||
| % Government policies | 2/2005 | 26 | 35 | 25 | 30 | |
| Prior qtr. | - | - | - | - | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 21 | 28 | 36 | 37 | |
| Prior qtr. | - | - | - | - | ||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 4 | 7 | 20 | 20 | |
| Prior qtr. | - | - | - | - | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 13 | 20 | 20 | 19 | |
| Prior qtr. | - | - | - | - | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 12 | 17 | 10 | 23 | |
| Prior qtr. | - | - | - | - | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 49 | 52 | 52 | 52 | |
| Prior qtr. | - | - | - | - | ||
| % Benefits | 2/2005 | 31 | 33 | 31 | 35 | |
| Prior qtr. | - | - | - | - | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 45 | 40 | 43 | 46 | |
| Prior qtr. | - | - | - | - | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 41 | 42 | 42 | 55 | |
| Prior qtr. | - | - | - | - | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 41 | 36 | 37 | 43 | |
| Prior qtr. | - | - | - | - | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 59 | 60 | 57 | 48 | |
| Prior qtr. | - | - | - | - | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 36 | 37 | 39 | 45 | |
| Prior qtr. | - | - | - | - | ||
| % All credit needs not satisfied | 2/2005 | 10 | 11 | 7 | 8 | |
| Prior qtr. | - | - | - | - | ||
| % No credit needs | 2/2005 | 49 | 48 | 50 | 43 | |
| Prior qtr. | - | - | - | - | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 60 | 58 | 46 | 58 | |
| Prior qtr. | - | - | - | - | ||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 17 | 16 | 13 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 11 | 12 | 8 | 9 | |
| Prior qtr. | - | - | - | - | ||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 13 | 11 | 11 | 9 | |
| Prior qtr. | - | - | - | - | ||
| % Taxes | 2/2005 | 13 | 13 | 11 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Employee quality/costs | 2/2005 | 7 | 11 | 8 | 9 | |
| Prior qtr. | - | - | - | - | ||
| % Insurance | 2/2005 | 17 | 16 | 14 | 25 | |
| Prior qtr. | - | - | - | - | ||
| % Big-business competition | 2/2005 | 13 | 15 | 15 | 14 | |
| Prior qtr. | - | - | - | - | ||
| % Inflation/Rising prices | 2/2005 | 11 | 12 | 13 | 14 | |
| Prior qtr. | - | - | - | - | ||
| % Credit availability/Interest rates | 2/2005 | 3 | 5 | 2 | 3 | |
| Prior qtr. | - | - | - | - | ||
| % Regulations/Red tape | 2/2005 | 6 | 7 | 10 | 7 | |
| Prior qtr. | - | - | - | - | ||
| Michigan Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Michigan is headed? | |
| Very satisfied | 5% |
| Somewhat satisfied | 43% |
| Not too satisfied | 26% |
| Not at all satisfied | 20% |
| Don't know/Refused | 6% |
| Total | 100% |
| Which type of energy price increases most affect your business? | |
| Gasoline | 38% |
| Natural gas | 18% |
| Electricity | 23% |
| Heating oil | 6% |
| Diesel | 5% |
| Other | 3% |
| Don't know/Refused | 7% |
| Total | 100% |
The Poll
NFIB’s Michigan Small-Business ConditionsSM is a telephone survey of a random sample of Michigan 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.
