Release Date: 06/ 01/ 2005
CONTACT: Gregg Thompson, (919) 844-6342 or Jim Brown, (615) 874-5288
Optimism, Improvements Registered in NFIB's Small-Business Conditions Survey
NORTH CAROLINA -- Bucking the regional trend, North Carolina's overall business climate showed improvement, according to the North Carolina Small-Business ConditionsSM. The report's data, which was released today by the National Federation of Independent Business/North Carolina, provides an overview of small-business conditions within North Carolina and compares them with neighboring states.
A net 44 percent (positive percent minus negative percent) of respondents this quarter said business conditions are "good," up from last quarter's net 38 percent. North Carolina's net 44 percent compared to a net 45 percent in South Carolina, net 44 percent in Tennessee and a net 48 percent in Virginia. While North Carolina showed improvement, each neighboring state experienced a slight decline in its business conditions index. Also in the current quarter, a net 42 percent of North Carolina respondents said the state's business environment is "supportive," a 6-percentage point improvement from last quarter.
"North Carolina's small-business owners remain positive about current business conditions as well as their outlook," said NFIB/North Carolina State Director Gregg Thompson, noting a net 25 percent of respondents see business conditions improving, one of the nation's best numbers. "The data from NFIB/North Carolina's Small-Business Conditions also indicates our state's business environment is competitive with surrounding states despite our challenges."
Sales and profits improved, and prospects remain promising, according to the data. A net 45 percent indicated that sales were "good" while a net 32 percent characterized profits as "good," up from a net 39 percent and net 24 percent, respectively. A net 65 percent (down slightly from last quarter's net 70 percent) said the outlook for business is "good" over the next three months.
The most important problems facing small-business owners are insurance (17 percent), inflation and rising prices (16 percent), and big business competition (14 percent). In valuing the area in which they do business, 40 percent cited quality of life, 23 percent pinpointed established roots and 19 percent emphasized opportunity. Seventy-one percent said they are either "very satisfied" or "somewhat satisfied" with North Carolina's direction.
A net 51 percent said purchasing prices increased the last three months, a slight decline from last quarter's net 54 percent. Thompson said even though pricing pressure eased slightly, it remains a trend worth following as higher energy prices continue to create concern for many small-business owners.
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.
| North Carolina Small-Business ConditionsSM | ||||||
| This chart shows the results from North Carolina and its comparative standing among selected states in the region. | ||||||
| N.C. | S.C. | Tenn. | Va. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 42 | 38 | 32 | 32 | |
| Prior qtr. | 36 | 40 | 31 | 35 | ||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 44 | 45 | 44 | 48 | |
| Prior qtr. | 38 | 55 | 47 | 53 | ||
| Net % "improving" | 5/2005 | 25 | 22 | 14 | 20 | |
| Prior qtr. | 27 | 26 | 21 | 24 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 65 | 69 | 61 | 69 | |
| Prior qtr. | 70 | 70 | 68 | 71 | ||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 39 | 43 | 45 | 42 | |
| Prior qtr. | 57 | 47 | 46 | 43 | ||
| % Lower costs | 5/2005 | 3 | 4 | 2 | 4 | |
| Prior qtr. | 4 | 4 | 4 | 5 | ||
| % Price increases | 5/2005 | 4 | 3 | 2 | 3 | |
| Prior qtr. | 2 | 4 | 4 | 5 | ||
| % Greater productivity | 5/2005 | 12 | 15 | 15 | 15 | |
| Prior qtr. | 17 | 18 | 14 | 12 | ||
| % Government policy | 5/2005 | 4 | 3 | 4 | 4 | |
| Prior qtr. | 2 | 4 | 6 | 7 | ||
| % Seasonal/Weather | 5/2005 | 12 | 16 | 15 | 12 | |
| 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 | ||
| N.C. | S.C. | Tenn. | Va. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 45 | 49 | 36 | 50 | |
| Prior qtr. | 39 | 43 | 41 | 46 | ||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 32 | 34 | 24 | 33 | |
| Prior qtr. | 24 | 24 | 27 | 31 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 19 | 21 | 15 | 21 | |
| Prior qtr. | 20 | 20 | 16 | 27 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 12 | 12 | 13 | 18 | |
| Prior qtr. | 16 | 10 | 15 | 14 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 57 | 60 | 53 | 61 | |
| Prior qtr. | 57 | 61 | 58 | 61 | ||
| % Benefits | 5/2005 | 24 | 21 | 29 | 25 | |
| Prior qtr. | 24 | 23 | 24 | 25 | ||
| N.C. | S.C. | Tenn. | Va. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 34 | 42 | 40 | 41 | |
| Prior qtr. | 41 | 41 | 41 | 42 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 42 | 35 | 38 | 43 | |
| Prior qtr. | 47 | 42 | 40 | 36 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 35 | 36 | 37 | |
| Prior qtr. | 48 | 41 | 31 | 41 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 49 | 50 | 56 | 51 | |
| Prior qtr. | 58 | 58 | 56 | 52 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 39 | 40 | 43 | 43 | |
| Prior qtr. | 40 | 41 | 3 | 43 | ||
| % All credit needs not satisfied | 5/2005 | 7 | 5 | 5 | 6 | |
| Prior qtr. | 6 | 7 | 5 | 5 | ||
| % No credit needs | 5/2005 | 48 | 50 | 47 | 45 | |
| Prior qtr. | 51 | 48 | 56 | 49 | ||
| N.C. | S.C. | Tenn. | Va. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 51 | 51 | 52 | 50 | |
| Prior qtr. | 54 | 49 | 49 | 42 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 15 | 21 | 17 | 16 | |
| Prior qtr. | 17 | 16 | 17 | 14 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 11 | 9 | 11 | 11 | |
| Prior qtr. | 17 | 13 | 10 | 13 | ||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 10 | 9 | 10 | 12 | |
| Prior qtr. | 11 | 10 | 9 | 7 | ||
| % Taxes | 5/2005 | 10 | 13 | 11 | 11 | |
| Prior qtr. | 9 | 11 | 12 | 10 | ||
| % Employee quality/costs | 5/2005 | 8 | 9 | 9 | 9 | |
| Prior qtr. | 11 | 11 | 12 | 11 | ||
| % Insurance | 5/2005 | 17 | 14 | 15 | 12 | |
| Prior qtr. | 15 | 19 | 14 | 15 | ||
| % Big-business competition | 5/2005 | 14 | 13 | 15 | 18 | |
| Prior qtr. | 15 | 13 | 15 | 16 | ||
| % Inflation/Rising prices | 5/2005 | 16 | 16 | 14 | 14 | |
| Prior qtr. | 16 | 12 | 12 | 8 | ||
| % Credit availability/Interest rates | 5/2005 | 2 | 3 | 4 | 3 | |
| Prior qtr. | 4 | 3 | 4 | 6 | ||
| % Regulations/Red tape | 5/2005 | 5 | 8 | 8 | 6 | |
| Prior qtr. | 5 | 7 | 6 | 9 | ||
* Insufficient cases
| North Carolina Quarterly Spotlight | |
| In general, how satisfied are you with the direction that North Carolina is headed? | |
| Very satisfied | 11% |
| Somewhat satisfied | 61% |
| Not too satisfied | 15% |
| Not at all satisfied | 7% |
| Don't know/Refused | 7% |
| Total | 100% |
| What do you value most in the area where you do business? | |
| Quality of life | 40% |
| Physical environment | 10% |
| Opportunity | 19% |
| Vibrance and vitality | 2% |
| My roots are here | 23% |
| Don't know/Refused | 7% |
| Total | 100% |
The Poll
NFIB’s North Carolina Small-Business ConditionsSM is a telephone survey of a random sample of North Carolina 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.
