Release Date: 06/ 01/ 2005
CONTACT: John Holub, (609) 989-8777 or Jim Jennings, (240) 645-4099
Employee Wages and Benefits Continue as Top Economic Pressure
NEW JERSEY -- New Jersey's small-business owners continue to have a negative view of the state's business climate, according to the second quarter findings of the New Jersey Small Business ConditionsSM survey. Only a net 10 percent of the small-business owners surveyed said the business environment is supportive.
The report's data, released today by the National Federation of Independent Business/New Jersey, provides an overview of small-business conditions within New Jersey and compares them with neighboring states. In Pennsylvania, for example, nearly a net one-quarter of the small-business owners surveyed said the commonwealth was supportive of small business.
While the New Jersey business owners didn't feel support in the state, they were optimistic when it came to business conditions. More than two-thirds of those surveyed said business conditions were good in their market area.
More than half of those surveyed said prices for goods and services they purchased had risen in the last three months. The costs of wages and benefits continue to be a major cost pressures on their businesses.
"Let's face it, doing business in New Jersey is expensive," said John Holub, NFIB/New Jersey state director. "But the costs of doing business – from employee wages to insurance costs – are not in the hands of the business owners. Lawmakers need to stop raising the cost of doing business, from the minimum wage to health insurance mandates."
On the plus side, Holub noted, business owners are optimistic, with more than half of the small-business owners reporting prospects for business over the next several months were good. That optimism was based on future sales prospects, according to the survey, followed by seasonal weather and greater productivity.
Insurance continues to be the No. 1 problem facing New Jersey's small businesses. Health costs were cited by the respondents as the top area in the state budget that needs to be reduced, followed by economic development and public welfare.
"This shows us that New Jersey's small-business owners are able to hold their own, but they want state government to begin acting like a business rather than being handed a pot of money," said Holub.
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. The text of the questions and the complete response set to the survey can be found at www.NFIB.com/research.
| New Jersey Small-Business ConditionsSM | ||||||
| This chart shows the results from New Jersey and its comparative standing among selected nearby states. | ||||||
| N.J. | N.Y. | Pa. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 11 | 0 | 22 | ||
| Prior qtr. | 15 | 3 | 23 | |||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 38 | 22 | 30 | ||
| Prior qtr. | 36 | 17 | 29 | |||
| Net % "improving" | 5/2005 | 13 | 0 | 0 | ||
| Prior qtr. | 12 | 7 | 15 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 57 | 47 | 43 | ||
| Prior qtr. | 54 | 56 | 63 | |||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 39 | 48 | 37 | ||
| Prior qtr. | 40 | 63 | 39 | |||
| % Lower costs | 5/2005 | 2 | 4 | 1 | ||
| Prior qtr. | 7 | 2 | 2 | |||
| % Price increases | 5/2005 | 3 | 3 | 4 | ||
| Prior qtr. | 1 | 4 | 3 | |||
| % Greater productivity | 5/2005 | 11 | 13 | 18 | ||
| Prior qtr. | 18 | 10 | 18 | |||
| % Government policy | 5/2005 | 6 | 4 | 4 | ||
| Prior qtr. | 5 | 2 | 4 | |||
| % Seasonal/Weather | 5/2005 | 14 | 8 | 12 | ||
| Prior qtr. | - | - | - | |||
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 5/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| N.J. | N.Y. | Pa. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 34 | 31 | 35 | ||
| Prior qtr. | 29 | 25 | 36 | |||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 21 | 10 | 21 | ||
| Prior qtr. | 16 | 12 | 20 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 22 | 21 | 19 | ||
| Prior qtr. | 23 | 22 | 19 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 16 | 16 | 15 | ||
| Prior qtr. | 13 | 29 | 16 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 49 | 45 | 51 | ||
| Prior qtr. | 45 | 56 | 45 | |||
| % Benefits | 5/2005 | 32 | 31 | 31 | ||
| Prior qtr. | 35 | 28 | 36 | |||
| N.J. | N.Y. | Pa. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 38 | 41 | 43 | ||
| Prior qtr. | 41 | 47 | 40 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 37 | 40 | 42 | ||
| Prior qtr. | 41 | 45 | 41 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 34 | 35 | 40 | ||
| Prior qtr. | 37 | 42 | 35 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 51 | 45 | 52 | ||
| Prior qtr. | 53 | 54 | 57 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 40 | 35 | 43 | ||
| Prior qtr. | 39 | 34 | 37 | |||
| % All credit needs not satisfied | 5/2005 | 5 | 6 | 4 | ||
| Prior qtr. | 7 | 12 | 6 | |||
| % No credit needs | 5/2005 | 46 | 50 | 45 | ||
| Prior qtr. | 50 | 47 | 53 | |||
| N.J. | N.Y. | Pa. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 50 | 54 | 59 | ||
| Prior qtr. | 47 | 56 | 51 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 18 | 14 | 18 | ||
| Prior qtr. | 12 | 16 | 20 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 13 | 11 | 11 | ||
| Prior qtr. | 12 | 17 | 9 | |||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 12 | 11 | 13 | ||
| Prior qtr. | 10 | 11 | 10 | |||
| % Taxes | 5/2005 | 9 | 11 | 11 | ||
| Prior qtr. | 11 | 16 | 12 | |||
| % Employee quality/costs | 5/2005 | 8 | 8 | 10 | ||
| Prior qtr. | 8 | 9 | 11 | |||
| % Insurance | 5/2005 | 20 | 16 | 19 | ||
| Prior qtr. | 22 | 17 | 18 | |||
| % Big-business competition | 5/2005 | 13 | 14 | 13 | ||
| Prior qtr. | 17 | 14 | 15 | |||
| % Inflation/Rising prices | 5/2005 | 10 | 10 | 13 | ||
| Prior qtr. | 6 | 11 | 7 | |||
| % Credit availability/Interest rates | 5/2005 | 3 | 1 | 3 | ||
| Prior qtr. | 4 | 5 | 3 | |||
| % Regulations/Red tape | 5/2005 | 8 | 7 | 7 | ||
| Prior qtr. | 7 | 7 | 10 | |||
* Insufficient cases
| New Jersey Quarterly Spotlight | |
| In what general area of the state budget are reductions MOST warranted? | |
| Education | 8% |
| Transportation and roads | 7% |
| Economic development | 13% |
| Health | 17% |
| Public welfare | 10% |
| Police and corrections | 4% |
| Other | 7% |
| Don't know/Refused | 35% |
| Total | 100% |
| Which type of tax increase would have the most adverse effect on your business? | |
| Payroll taxes | 20% |
| Corporate income or franchise taxes | 11% |
| Real property taxes | 13% |
| Sales taxes | 11% |
| Personal income taxes | 14% |
| Personal property, including inventory taxes | 9% |
| Other | 3% |
| Don't know/Refused | 19% |
| Total | 100% |
The Poll
NFIB’s New Jersey Small-Business ConditionsSM is a telephone survey of a random sample of New Jersey 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.
