Release Date: 12/ 01/ 2005
CONTACT: Jim Jennings, (240) 645-4099
Insurance, Taxes and Weak Sales Remain Top Problems
TRENTON, N.J. -- New Jersey's small-business owners see the state's business environment getting worse, with only a net 5 percent reporting the state's business environment as "supportive" -- down from a net 11 percent in the third quarter, according to the New Jersey Small-Business ConditionsSM. The report's data, which was 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.
Pennsylvania and New York small-business owners had even gloomier outlooks, with only 7 percent and negative 1 percent, respectively, reporting a state environment that was supportive of small business.
"It's the cumulative effect. The combination of a higher minimum wage, pro-union legislation and high taxes makes New Jersey a difficult place to run a business," said Tim Goodrich, acting state director of NFIB/New Jersey.
Energy costs could also account for the dark outlook, with 35 percent reporting that the recent run-up in energy costs was having a somewhat to serious negative impact on their business, resulting in 19 percent of the business owners raising their prices to offset the increases.
A net 33 percent of the state's small employers believed business conditions in their individual market areas are "good," but once again this is down from 43 percent in the third quarter. Additionally New Jersey small-business owners don't see conditions "improving." Only 2 percent believed conditions would improve compared to a negative 6 percent in New York and a negative 1 percent in Pennsylvania.
Prospects aren't much better for the next three months. A net 49 percent characterized the outlook for business over the next three months as better, down from the net 62 percent last quarter. Business owners reported both sales and profits down from last quarter.
When asked to rank their most important business problem, New Jersey small-business owners ranked insurance as the most serious of all conditions, closely followed by taxes and weak sales. Business owners surveyed said their purchasing prices continue to rise as more businesses continue to pass those costs on in higher prices to their customers (21 percent compared to 18 percent last quarter).
| 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 | 11/2005 | 5 | -1 | 7 | ||
| Prior qtr. | 11 | 12 | 10 | |||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 33 | 17 | 25 | ||
| Prior qtr. | 43 | 29 | 30 | |||
| Net % "improving" | 11/2005 | 2 | -6 | -1 | ||
| Prior qtr. | 7 | 9 | 1 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 49 | 48 | 46 | ||
| Prior qtr. | 62 | 53 | 52 | |||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 54 | 40 | 45 | ||
| Prior qtr. | 42 | 47 | 41 | |||
| % Lower costs | 11/2005 | 4 | 6 | 5 | ||
| Prior qtr. | 3 | 3 | 4 | |||
| % Price increases | 11/2005 | 5 | 8 | 6 | ||
| Prior qtr. | 5 | 7 | 5 | |||
| % Greater productivity | 11/2005 | 12 | 15 | 11 | ||
| Prior qtr. | 15 | 13 | 12 | |||
| % Government policy | 11/2005 | 5 | 3 | 5 | ||
| Prior qtr. | 3 | 5 | 3 | |||
| % Seasonal/Weather | 11/2005 | 7 | 9 | 12 | ||
| Prior qtr. | 10 | 7 | 9 | |||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| N.J. | N.Y. | Pa. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 39 | 34 | 37 | ||
| Prior qtr. | 42 | 42 | 43 | |||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 22 | 13 | 17 | ||
| Prior qtr. | 31 | 26 | 22 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 19 | 20 | 18 | ||
| Prior qtr. | 22 | 23 | 21 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 20 | 17 | 17 | ||
| Prior qtr. | 17 | 19 | 21 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 49 | 50 | 42 | ||
| Prior qtr. | 49 | 48 | 44 | |||
| % Benefits | 11/2005 | 36 | 30 | 36 | ||
| Prior qtr. | 33 | 29 | 36 | |||
| N.J. | N.Y. | Pa. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 42 | 48 | 41 | ||
| Prior qtr. | 46 | 46 | 38 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 41 | 46 | 47 | ||
| Prior qtr. | 41 | 46 | 38 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 43 | 44 | 40 | ||
| Prior qtr. | 40 | 43 | 38 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 50 | 55 | 52 | ||
| Prior qtr. | 53 | 55 | 50 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 35 | 40 | 37 | ||
| Prior qtr. | 35 | 32 | 37 | |||
| % All credit needs not satisfied | 11/2005 | 11 | 10 | 8 | ||
| Prior qtr. | 6 | 10 | 4 | |||
| % No credit needs | 11/2005 | 51 | 45 | 49 | ||
| Prior qtr. | 52 | 54 | 52 | |||
| N.J. | N.Y. | Pa. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 58 | 68 | 63 | ||
| Prior qtr. | 50 | 55 | 59 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 21 | 24 | 20 | ||
| Prior qtr. | 18 | 18 | 18 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 10 | 12 | 7 | ||
| Prior qtr. | 9 | 11 | 10 | |||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 11 | 10 | 9 | ||
| Prior qtr. | 9 | 11 | 9 | |||
| % Taxes | 11/2005 | 13 | 15 | 11 | ||
| Prior qtr. | 10 | 15 | 15 | |||
| % Employee quality/costs | 11/2005 | 9 | 9 | 8 | ||
| Prior qtr. | 8 | 7 | 7 | |||
| % Insurance | 11/2005 | 15 | 16 | 17 | ||
| Prior qtr. | 21 | 15 | 18 | |||
| % Big-business competition | 11/2005 | 13 | 10 | 15 | ||
| Prior qtr. | 15 | 13 | 14 | |||
| % Inflation/Rising prices | 11/2005 | 11 | 12 | 14 | ||
| Prior qtr. | 13 | 10 | 13 | |||
| % Credit availability/Interest rates | 11/2005 | 3 | 3 | 3 | ||
| Prior qtr. | 2 | 3 | 3 | |||
| % Regulations/Red tape | 11/2005 | 8 | 8 | 9 | ||
| Prior qtr. | 9 | 8 | 7 | |||
* Insufficient cases
| New Jersey Quarterly Spotlight | |
| What has been the impact on your business of the recent run-up in energy prices? | |
| Seriously negative | 16% |
| Somewhat negative | 19% |
| Slightly negative | 32% |
| No impact | 23% |
| Positive | 3% |
| Don't know | 5% |
| Refused | 2% |
| Total | 100% |
| What is the single most important action you have recently taken to offset rising energy costs? | |
| Raised selling prices | 19% |
| Invested in energy-conserving equipment or vehicles | 8% |
| Reduced energy use | 24% |
| Absorbed costs with lower earnings | 17% |
| Reduced non-energy costs such as payroll | 5% |
| Other | 10% |
| Don't know | 11% |
| Refused | 4% |
| 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.
