Release Date: 06/ 01/ 2005
CONTACT: Charles Owens, (517) 485-3409 or Kevin Walter, (614) 221-4107
May Survey Results Show State Falling Behind
MICHIGAN -- Michigan's overall business climate and future direction continued to lose ground, according to the most recent Michigan Small-Business ConditionsSM poll. The 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.
"Michigan's rankings from the first quarter survey were so poor we didn't think they could get much worse, but they did," said Charlie Owens, NFIB/Michigan state director. "We have moved to the bottom rank on a number of key measures and it is very troubling."
The net number of small employers (percent positive minus percent negative) who believed business conditions in their market area are good was 0, a drop of 15 percentage points from February. Michigan retained its last place ranking on the measure. Worse, conditions appear to be deteriorating. A negative 4 percent (-4) characterized conditions as "improving," a drop of 20 points from 16 percent in the last survey, a change that placed Michigan at rock bottom for that climate measure as well. In other key climate measures, Michigan was also well below the average of other states polled.
A net negative 9 percent (-9) indicated they were satisfied with the direction the state is headed, a drop of 11 points from the first quarter survey. Michigan's satisfaction with state direction was the lowest of the 11 states where the same question was asked. For example, Tennessee had a net 49 percent who were satisfied. Ohio had an even net 0 percent.
"I strongly believe that the shift in results in the 'direction the state is headed' question is a reflection of the small-business reaction to the governor's divisive single business tax shift proposal," said Owens. "It is consistent with the message small-business owners have been sending in faxes, e-mails and testimony at the statewide hearings on the plan."
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 | 5/2005 | 7 | 32 | 8 | 31 | |
| Prior qtr. | 18 | 21 | 27 | 22 | ||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 0 | 31 | 23 | 40 | |
| Prior qtr. | 15 | 31 | 34 | 33 | ||
| Net % "improving" | 5/2005 | -4 | 12 | 4 | 19 | |
| Prior qtr. | 16 | 15 | 17 | 10 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 52 | 52 | 51 | 68 | |
| Prior qtr. | 55 | 63 | 68 | 66 | ||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 38 | 47 | 40 | 44 | |
| Prior qtr. | 45 | 55 | 39 | 59 | ||
| % Lower costs | 5/2005 | 3 | 2 | 2 | 2 | |
| Prior qtr. | 2 | 3 | 3 | 1 | ||
| % Price increases | 5/2005 | 5 | 3 | 6 | 5 | |
| Prior qtr. | 2 | 2 | 5 | 5 | ||
| % Greater productivity | 5/2005 | 12 | 12 | 17 | 14 | |
| Prior qtr. | 14 | 17 | 19 | 12 | ||
| % Government policy | 5/2005 | 2 | 4 | 6 | 4 | |
| Prior qtr. | 3 | 2 | 4 | 3 | ||
| % Seasonal/Weather | 5/2005 | 19 | 13 | 13 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Cost increases | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Pressure on selling prices | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Lower productivity | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Government policies | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 24 | 35 | 33 | 43 | |
| Prior qtr. | 21 | 28 | 36 | 37 | ||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 6 | 19 | 17 | 23 | |
| Prior qtr. | 4 | 7 | 20 | 20 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 16 | 16 | 17 | 20 | |
| Prior qtr. | 13 | 20 | 20 | 19 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 11 | 14 | 9 | 12 | |
| Prior qtr. | 12 | 17 | 10 | 23 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 52 | 55 | 52 | 53 | |
| Prior qtr. | 49 | 52 | 52 | 52 | ||
| % Benefits | 5/2005 | 30 | 30 | 30 | 33 | |
| Prior qtr. | 31 | 33 | 31 | 35 | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 38 | 40 | 41 | |
| Prior qtr. | 45 | 40 | 43 | 46 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 38 | 39 | 41 | |
| Prior qtr. | 41 | 42 | 42 | 55 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 42 | 35 | 35 | 36 | |
| Prior qtr. | 41 | 36 | 37 | 43 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 51 | 57 | 50 | 56 | |
| Prior qtr. | 59 | 60 | 57 | 48 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 34 | 38 | 36 | 41 | |
| Prior qtr. | 36 | 37 | 39 | 45 | ||
| % All credit needs not satisfied | 5/2005 | 10 | 6 | 7 | 6 | |
| Prior qtr. | 10 | 11 | 7 | 8 | ||
| % No credit needs | 5/2005 | 49 | 50 | 51 | 46 | |
| Prior qtr. | 49 | 48 | 50 | 43 | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 50 | 57 | 51 | 54 | |
| Prior qtr. | 60 | 58 | 46 | 58 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 15 | 17 | 17 | 20 | |
| Prior qtr. | 17 | 16 | 13 | 15 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 10 | 12 | 12 | 8 | |
| Prior qtr. | 11 | 12 | 8 | 9 | ||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 16 | 9 | 12 | 10 | |
| Prior qtr. | 13 | 11 | 11 | 9 | ||
| % Taxes | 5/2005 | 11 | 15 | 11 | 15 | |
| Prior qtr. | 13 | 13 | 11 | 12 | ||
| % Employee quality/costs | 5/2005 | 5 | 4 | 8 | 6 | |
| Prior qtr. | 7 | 11 | 8 | 9 | ||
| % Insurance | 5/2005 | 20 | 18 | 18 | 23 | |
| Prior qtr. | 17 | 16 | 14 | 25 | ||
| % Big-business competition | 5/2005 | 11 | 15 | 13 | 15 | |
| Prior qtr. | 13 | 15 | 15 | 14 | ||
| % Inflation/Rising prices | 5/2005 | 10 | 13 | 15 | 13 | |
| Prior qtr. | 11 | 12 | 13 | 14 | ||
| % Credit availability/Interest rates | 5/2005 | 1 | 4 | 3 | 3 | |
| Prior qtr. | 3 | 5 | 2 | 3 | ||
| % Regulations/Red tape | 5/2005 | 8 | 8 | 7 | 4 | |
| Prior qtr. | 6 | 7 | 10 | 7 | ||
| Michigan Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Michigan is headed? | |
| Very satisfied | 4% |
| Somewhat satisfied | 39% |
| Not too satisfied | 31% |
| Not at all satisfied | 21% |
| Don't know/Refused | 5% |
| Total | 100% |
| What do you value most in the area where you do business? | |
| Quality of life | 30% |
| Physical environment | 7% |
| Opportunity | 15% |
| Vibrance and vitality | 1% |
| My roots are here | 37% |
| Other | 3% |
| Don't know/Refused | 8% |
| 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.
