Release Date: 12/ 01/ 2005
CONTACT: Gregg Thompson, (919) 844-6342 or Jim Brown, (615) 874-5288
Results Trail South Carolina, Tennessee and Virginia
RALEIGH, N.C. -- North Carolina's small-business owners said sales and profits are declining, according to this quarter's 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 40 percent (positive percent minus negative percent) of respondents said sales were "good," down from a net 50 percent last quarter, while a net 24 percent characterized profits as "good," down from a net 32 percent the last two quarters. The net 40 percent in sales and net 24 percent in profits trailed South Carolina (net 44 percent; net 32 percent), Tennessee (net 47 percent; net 32 percent) and Virginia (net 53 percent; net 33 percent). North Carolina ranked No. 18 in sales and No. 14 in profits among 26 states in the survey group.
According to 66 percent of respondents, average prices paid for goods and services "increased" over the last three months, up from last quarter's 55 percent, while 23 percent reported they increased average selling prices over the last three months, up from last quarter's 17 percent. A net 60 percent said the outlook for business is "good" over the next three months, down from last quarter's net 65 percent.
A net 38 percent of respondents said business conditions are "good," down from last quarter's net 43 percent. The figure trailed South Carolina (net 45 percent), Tennessee (net 43 percent) and Virginia (net 53 percent), and was actually closer to California (net 41 percent) and Massachusetts (net 34 percent). Optimism continued to fade, dropping to a net 10 percent, which compared to a net 14 percent in September and net 25 percent in June.
"Curiously, business conditions in North Carolina are closer to states like California and Massachusetts than South Carolina and Virginia," NFIB/North Carolina State Director Gregg Thompson said. "There's been a shift in momentum, and clearly North Carolina's small-business owners are being challenged a great deal by inflationary pressures in this post-Katrina environment."
Asked which total costs are rising most rapidly, respondents answered materials (28 percent), energy (26 percent), insurance (25 percent), and labor (9 percent). Thompson asserted North Carolina's gas tax, which is the highest in the Southeast at 27.1 cents per gallon, is a contributing factor to the pressures small-business owners are facing.
| 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 | 11/2005 | 32 | 33 | 31 | 32 | |
| Prior qtr. | 38 | 40 | 32 | 41 | ||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 38 | 45 | 43 | 53 | |
| Prior qtr. | 43 | 45 | 40 | 62 | ||
| Net % "improving" | 11/2005 | 10 | 15 | 9 | 18 | |
| Prior qtr. | 14 | 14 | 6 | 27 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 60 | 56 | 62 | 61 | |
| Prior qtr. | 65 | 62 | 62 | 73 | ||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 45 | 42 | 51 | 56 | |
| Prior qtr. | 43 | 40 | 37 | 49 | ||
| % Lower costs | 11/2005 | 3 | 4 | 5 | 4 | |
| Prior qtr. | 2 | 3 | 3 | 2 | ||
| % Price increases | 11/2005 | 3 | 8 | 5 | 3 | |
| Prior qtr. | 4 | 3 | 4 | 2 | ||
| % Greater productivity | 11/2005 | 15 | 13 | 16 | 14 | |
| Prior qtr. | 18 | 17 | 16 | 9 | ||
| % Government policy | 11/2005 | 6 | 5 | 5 | 4 | |
| Prior qtr. | 4 | 1 | 4 | 5 | ||
| % Seasonal/Weather | 11/2005 | 12 | 10 | 5 | 9 | |
| Prior qtr. | 9 | 11 | 10 | 10 | ||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Cost increases | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Lower productivity | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Government policies | 11/2005 | 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" | 11/2005 | 40 | 44 | 47 | 53 | |
| Prior qtr. | 50 | 55 | 41 | 56 | ||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 24 | 32 | 32 | 33 | |
| Prior qtr. | 32 | 40 | 27 | 37 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 17 | 19 | 17 | 22 | |
| Prior qtr. | 15 | 17 | 20 | 26 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 14 | 11 | 15 | 10 | |
| Prior qtr. | 17 | 15 | 15 | 19 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 57 | 48 | 57 | 57 | |
| Prior qtr. | 54 | 57 | 59 | 58 | ||
| % Benefits | 11/2005 | 28 | 32 | 24 | 26 | |
| Prior qtr. | 28 | 23 | 24 | 27 | ||
| N.C. | S.C. | Tenn. | Va. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 41 | 45 | 43 | 45 | |
| Prior qtr. | 44 | 37 | 41 | 43 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 43 | 42 | 47 | 41 | |
| Prior qtr. | 43 | 41 | 39 | 41 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 44 | 43 | 42 | 42 | |
| Prior qtr. | 42 | 43 | 39 | 39 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 54 | 48 | 58 | 51 | |
| Prior qtr. | 52 | 54 | 49 | 47 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 38 | 40 | 37 | 42 | |
| Prior qtr. | 39 | 38 | 35 | 37 | ||
| % All credit needs not satisfied | 11/2005 | 8 | 10 | 8 | 8 | |
| Prior qtr. | 5 | 6 | 6 | 7 | ||
| % No credit needs | 11/2005 | 51 | 44 | 52 | 46 | |
| Prior qtr. | 52 | 49 | 53 | 50 | ||
| N.C. | S.C. | Tenn. | Va. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 64 | 62 | 64 | 58 | |
| Prior qtr. | 54 | 53 | 58 | 56 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 18 | 20 | 21 | 22 | |
| Prior qtr. | 14 | 14 | 13 | 18 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 12 | 10 | 10 | 7 | |
| Prior qtr. | 9 | 9 | 10 | 13 | ||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 8 | 6 | 9 | 10 | |
| Prior qtr. | 9 | 11 | 8 | 8 | ||
| % Taxes | 11/2005 | 9 | 11 | 14 | 12 | |
| Prior qtr. | 13 | 14 | 13 | 11 | ||
| % Employee quality/costs | 11/2005 | 11 | 12 | 8 | 11 | |
| Prior qtr. | 10 | 7 | 10 | 13 | ||
| % Insurance | 11/2005 | 14 | 14 | 9 | 12 | |
| Prior qtr. | 17 | 16 | 19 | 12 | ||
| % Big-business competition | 11/2005 | 16 | 14 | 13 | 14 | |
| Prior qtr. | 14 | 11 | 11 | 17 | ||
| % Inflation/Rising prices | 11/2005 | 17 | 16 | 22 | 16 | |
| Prior qtr. | 12 | 15 | 13 | 15 | ||
| % Credit availability/Interest rates | 11/2005 | 3 | 4 | 4 | 3 | |
| Prior qtr. | 3 | 3 | 2 | 3 | ||
| % Regulations/Red tape | 11/2005 | 7 | 8 | 7 | 7 | |
| Prior qtr. | 8 | 6 | 8 | 6 | ||
* Insufficient cases
| North Carolina Quarterly Spotlight | |
| Which of your total costs are rising most rapidly? | |
| Energy | 26% |
| Labor | 9% |
| Insurance | 25% |
| Materials | 28% |
| Some other | 2% |
| None rising rapidly | 3% |
| Don't know/Refused | 7% |
| Total | 100% |
| Which of your total costs are rising next most rapidly? | |
| Energy | 24% |
| Labor | 18% |
| Insurance | 23% |
| Materials | 22% |
| Some other | 5% |
| None rising rapidly | 4% |
| Don't know/Refused | 5% |
| 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.
