Release Date: 03/ 01/ 2005
CONTACT: Mike Hickey, (651) 293-1283 or Kevin Walter, (614) 221-4107.
Minnesota’s overall small-business climate is improving according to the inaugural Minnesota Small-Business ConditionsSM study. The new report’s data released today by the small-business group the National Federation of Independent Business (NFIB)/Minnesota provides an overview of small-business conditions within Minnesota and compares them with neighboring and other states.
“Various sources have produced numerous rankings and surveys of Minnesota’s business climate relative to other states, but this is the first one that specifically focuses on small-business conditions,” said Mike Hickey, NFIB/Minnesota state director.
“The report is a mix of positive and not-so-positive news,” said Hickey. Minnesota’s business climate and business conditions are comparable to our neighbors, though about in the middle of the 26 states surveyed. A net 27 percent (percent positive minus percent negative) of Minnesota’s small-business owners believe the state’s business climate is supportive. Neighboring Iowa is at 33 percent and Wisconsin is at 22 percent. The average net percentage for all states surveyed regarding their respective business environment was 25. South Carolina had the highest net percentage (40 percent) and Washington had the lowest (-9 percent).
Similarly, a net 38 percent saw business conditions in their market area as good compared to 37 percent in Iowa and 22 percent in Wisconsin. They also are optimistic about the future. A net 63 percent of Minnesota’s small-business owners characterize the outlook for business over the next three months as good.
When asked their most important business problem, Minnesota small-business owners ranked the cost of insurance as the most serious of all conditions. “This comes as no surprise. Our members continue to be plagued by the high cost of insurance, especially health insurance, with no relief in sight,” said Hickey. Another high-ranking problem was big-business competition.
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. Visit www.NFIB.com/MN for information about NFIB’s activities in Minnesota. 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.
| Minnesota Small-Business ConditionsSM | ||||||
| This chart shows the results from Minnesota and its comparative standing among selected nearby states. | ||||||
| Minn. | Iowa | Wis. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 27 | 33 | 22 | ||
| Prior qtr. | - | - | - | |||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 38 | 37 | 33 | ||
| Prior qtr. | - | - | - | |||
| Net % "improving" | 2/2005 | 12 | 15 | 10 | ||
| Prior qtr. | - | - | - | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 63 | 61 | 66 | ||
| Prior qtr. | - | - | - | |||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 57 | 42 | 59 | ||
| Prior qtr. | - | - | - | |||
| % Lower costs | 2/2005 | 2 | 3 | 1 | ||
| Prior qtr. | - | - | - | |||
| % Price increases | 2/2005 | 3 | 4 | 5 | ||
| Prior qtr. | - | - | - | |||
| % Greater productivity | 2/2005 | 15 | 16 | 12 | ||
| Prior qtr. | - | - | - | |||
| % Government policy | 2/2005 | 3 | 5 | 3 | ||
| Prior qtr. | - | - | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 30 | 29 | 20 | ||
| Prior qtr. | - | - | - | |||
| % Cost increases | 2/2005 | 10 | 18 | 10 | ||
| Prior qtr. | - | - | - | |||
| % Pressure on selling prices | 2/2005 | 5 | 0 | 10 | ||
| Prior qtr. | - | - | - | |||
| % Lower productivity | 2/2005 | 0 | 6 | 5 | ||
| Prior qtr. | - | - | - | |||
| % Government policy | 2/2005 | 25 | 6 | 30 | ||
| Prior qtr. | - | - | - | |||
| Minn. | Iowa | Wis. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 27 | 44 | 37 | ||
| Prior qtr. | - | - | - | |||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 12 | 29 | 20 | ||
| Prior qtr. | - | - | - | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 16 | 15 | 19 | ||
| Prior qtr. | - | - | - | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 22 | 13 | 23 | ||
| Prior qtr. | - | - | - | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 53 | 55 | 52 | ||
| Prior qtr. | - | - | - | |||
| % Benefits | 2/2005 | 30 | 26 | 35 | ||
| Prior qtr. | - | - | - | |||
| Minn. | Iowa | Wis. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 46 | 41 | 46 | ||
| Prior qtr. | - | - | - | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 46 | 46 | 55 | ||
| Prior qtr. | - | - | - | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 47 | 37 | 43 | ||
| Prior qtr. | - | - | - | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 56 | 51 | 48 | ||
| Prior qtr. | - | - | - | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 35 | 47 | 45 | ||
| Prior qtr. | - | - | - | |||
| % All credit needs not satisfied | 2/2005 | 8 | 5 | 8 | ||
| Prior qtr. | - | - | - | |||
| % No credit needs | 2/2005 | 52 | 43 | 43 | ||
| Prior qtr. | - | - | - | |||
| Minn. | Iowa | Wis. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 60 | 50 | 58 | ||
| Prior qtr. | - | - | - | |||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 21 | 14 | 15 | ||
| Prior qtr. | - | - | - | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 12 | 10 | 9 | ||
| Prior qtr. | - | - | - | |||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 12 | 8 | 9 | ||
| Prior qtr. | - | - | - | |||
| % Taxes | 2/2005 | 8 | 9 | 12 | ||
| Prior qtr. | - | - | - | |||
| % Employee quality/costs | 2/2005 | 9 | 8 | 9 | ||
| Prior qtr. | - | - | - | |||
| % Insurance | 2/2005 | 21 | 19 | 25 | ||
| Prior qtr. | - | - | - | |||
| % Big-business competition | 2/2005 | 17 | 17 | 14 | ||
| Prior qtr. | - | - | - | |||
| % Inflation/Rising prices | 2/2005 | 13 | 10 | 14 | ||
| Prior qtr. | - | - | - | |||
| % Credit availability/Interest rates | 2/2005 | 2 | 1 | 3 | ||
| Prior qtr. | - | - | - | |||
| % Regulations/Red tape | 2/2005 | 8 | 11 | 7 | ||
| Prior qtr. | - | - | - | |||
| Minnesota Quarterly Spotlight | |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 8% |
| Workers' compensation | 14% |
| Product or professional liability | 10% |
| Property and casualty | 12% |
| Employee health | 44% |
| Don't know/Refused | 12% |
| Total | 100% |
| On balance, is your business very positively, somewhat positively, somewhat negatively or very negatively impacted by trade with other countries? | |
| Very positively | 8% |
| Somewhat positively | 15% |
| Neither; not impacted | 55% |
| Somewhat negatively | 9% |
| Very negatively | 5% |
| Don't know/Refused | 7% |
| Total | 100% |
The Poll
NFIB’s Minnesota Small-Business ConditionsSM is a telephone survey of a random sample of Minnesota 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.
