Release Date: 09/ 01/ 2005
CONTACT: Charles Owens or Keith Carey, (517) 485-3409
or Michael Diegel, (202) 554-9000
Third Quarter Results put Michigan in the Basement
LANSING, Mich. -- Michigan’s overall business climate ratings hit record lows 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 and second 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 five out of seven key measures.”
Michigan ranked last among the 26 states included in the survey on current business conditions, whether conditions were improving, the outlook for the next three months, whether sales were considered to be “good” and whether profits were considered to be “good.” Michigan was only third from the bottom on a supportive business environment, with California and Connecticut tied for second from last, and Washington in last place. Michigan tied with three other states for the second-to-last slot in current job openings.
“If this were a race to the bottom, Michigan would be in the lead,” said Owens. “Our business climate situation is becoming desperate, and it is incumbent upon our state leaders to take immediate action.” Owens urged the legislature to move forward on the recently proposed House tax plan and to avoid weakening the significant tort reforms that were passed in 1995. In addition, he asked the legislature to scuttle attempts by the administration to impose onerous new ergonomic regulations.
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 | 8/2005 | 8 | 28 | 11 | 17 | |
| Prior qtr. | 7 | 32 | 8 | 31 | ||
| Business conditions in market area | ||||||
| Net % "good" | 8/2005 | 2 | 29 | 20 | 36 | |
| Prior qtr. | 0 | 31 | 23 | 40 | ||
| Net % "improving" | 8/2005 | -5 | 9 | 2 | 6 | |
| Prior qtr. | -4 | 12 | 4 | 19 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 8/2005 | 40 | 56 | 49 | 60 | |
| Prior qtr. | 52 | 52 | 51 | 68 | ||
| Reason for optimism | ||||||
| % Sales prospects | 8/2005 | 42 | 45 | 50 | 49 | |
| Prior qtr. | 38 | 47 | 40 | 44 | ||
| % Lower costs | 8/2005 | 3 | 4 | 4 | 2 | |
| Prior qtr. | 3 | 2 | 2 | 2 | ||
| % Price increases | 8/2005 | 2 | 5 | 2 | 3 | |
| Prior qtr. | 5 | 3 | 6 | 5 | ||
| % Greater productivity | 8/2005 | 11 | 12 | 12 | 11 | |
| Prior qtr. | 12 | 12 | 17 | 14 | ||
| % Government policy | 8/2005 | 4 | 5 | 3 | 2 | |
| Prior qtr. | 2 | 4 | 6 | 4 | ||
| % Seasonal/Weather | 8/2005 | 10 | 8 | 8 | 10 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 8/2005 | IC* | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Cost increases | 8/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Pressure on selling prices | 8/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Lower productivity | 8/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Government policies | 8/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 8/2005 | 22 | 37 | 34 | 42 | |
| Prior qtr. | 24 | 35 | 33 | 43 | ||
| Profits | ||||||
| Net % profits "good" | 8/2005 | 0 | 14 | 13 | 22 | |
| Prior qtr. | 6 | 19 | 17 | 23 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 8/2005 | 17 | 19 | 17 | 24 | |
| Prior qtr. | 16 | 16 | 17 | 20 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 8/2005 | 8 | 12 | 12 | 20 | |
| Prior qtr. | 11 | 14 | 9 | 12 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 8/2005 | 50 | 57 | 50 | 49 | |
| Prior qtr. | 52 | 55 | 52 | 53 | ||
| % Benefits | 8/2005 | 31 | 26 | 33 | 35 | |
| Prior qtr. | 30 | 30 | 30 | 33 | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 8/2005 | 38 | 41 | 40 | 41 | |
| Prior qtr. | 39 | 38 | 40 | 41 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 35 | 42 | 40 | 45 | |
| Prior qtr. | 39 | 38 | 39 | 41 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 8/2005 | 36 | 39 | 39 | 44 | |
| Prior qtr. | 42 | 35 | 35 | 36 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 8/2005 | 53 | 49 | 50 | 54 | |
| Prior qtr. | 51 | 57 | 50 | 56 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 8/2005 | 31 | 35 | 37 | 43 | |
| Prior qtr. | 34 | 38 | 36 | 41 | ||
| % All credit needs not satisfied | 8/2005 | 7 | 5 | 6 | 6 | |
| Prior qtr. | 10 | 6 | 7 | 6 | ||
| % No credit needs | 8/2005 | 55 | 53 | 51 | 48 | |
| Prior qtr. | 49 | 50 | 51 | 46 | ||
| Mich. | Ind. | Ohio | Wis. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 8/2005 | 55 | 55 | 55 | 63 | |
| Prior qtr. | 50 | 57 | 51 | 54 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 8/2005 | 10 | 16 | 16 | 22 | |
| Prior qtr. | 15 | 17 | 17 | 20 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 8/2005 | 9 | 8 | 8 | 9 | |
| Prior qtr. | 10 | 12 | 12 | 8 | ||
| Single most important business problem | ||||||
| % Weak sales | 8/2005 | 17 | 11 | 13 | 11 | |
| Prior qtr. | 16 | 9 | 12 | 10 | ||
| % Taxes | 8/2005 | 11 | 15 | 18 | 12 | |
| Prior qtr. | 11 | 15 | 11 | 15 | ||
| % Employee quality/costs | 8/2005 | 7 | 9 | 8 | 9 | |
| Prior qtr. | 5 | 4 | 8 | 6 | ||
| % Insurance | 8/2005 | 17 | 16 | 13 | 20 | |
| Prior qtr. | 20 | 18 | 18 | 23 | ||
| % Big-business competition | 8/2005 | 11 | 13 | 14 | 13 | |
| Prior qtr. | 11 | 15 | 13 | 15 | ||
| % Inflation/Rising prices | 8/2005 | 14 | 13 | 12 | 12 | |
| Prior qtr. | 10 | 13 | 15 | 13 | ||
| % Credit availability/Interest rates | 8/2005 | 3 | 2 | 3 | 1 | |
| Prior qtr. | 1 | 4 | 3 | 3 | ||
| % Regulations/Red tape | 8/2005 | 5 | 6 | 8 | 8 | |
| Prior qtr. | 8 | 8 | 7 | 4 | ||
| Michigan Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Michigan is headed? Are you very satisfied, somewhat satisfied, not too satisfied or not at all satisfied? | |
| Very satisfied | 1% |
| Somewhat satisfied | 39% |
| Not too satisfied | 32% |
| Not at all satisfied | 22% |
| Don't know/Refused | 5% |
| Total | 100% |
| How would you rate the quality of education in Michigan's public schools, K-12? | |
| Excellent | 6% |
| Good | 32% |
| Average | 35% |
| Not good | 8% |
| Poor | 11% |
| 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.
