Release Date: 06/ 01/ 2005
CONTACT: Mark Alesse, (518) 434-1262 or Jim Jennings, (240) 645-4099
NEW YORK -- The mood of small-business owners in New York has not improved with the arrival of spring, according to the latest figures from the Small-Business ConditionsSM report. The report, released today by the National Federation of Independent Business/New York provides an overview of small-business conditions within the state.
Small-business owners are evenly split over whether the business climate is "supportive" or not. Of the 26 states surveyed, including New Jersey, Pennsylvania and Massachusetts, New York consistently ranked near or at the bottom when it came to business climate, business conditions, sales, profits and business prospects.
Despite unhappiness about the business climate, many business owners have a positive outlook about their local market conditions. Nearly 22 percent of those responding said conditions in their locales are currently good, an increase from the first quarter. Sales prospects are driving that optimism. A net 31 percent said sales were good, compared with 25 percent in the first quarter, while only 10 percent said profits were good.
"While sales may be growing, and that's great news, the small-business community has a somewhat jaundiced view of the business climate and are disappointed at New York's continued inability to do anything about the high cost of doing business," said Mark Alesse, state director of the National Federation of Independent Business.
The rapidly rising cost of insurance continues to burden small businesses, starting with health coverage, which was cited as the heaviest weight, followed by workers' compensation and liability insurance. All have been the subject of continuous lobbying and debate, but there has been limited action in the legislature.
Small-business owners also reported that the prices that they have to pay for goods and services have increased over the past three months while they have kept their prices level. They also face the added cost pressure from wages, due to a state minimum wage hike, and employee benefits.
Reflecting a low level of optimism, small-business owners are not in a spending mood. More than three-quarters say they have no job openings at the current time, and 41 percent have not invested in new technology or equipment, a slight drop from the first quarter.
"Small-business owners have endured a tough couple of years, with the state's high cost of doing business taking its toll," said Alesse. "While it seems the business community is holding its own right now, they are also waiting to see where the broader economy heads and hoping that the legislature will finally address some of their problems, like the laws that have sent insurance costs through the roof."
Aware of the state's recent on-time (but, record-high) budget, business owners were asked: "What part of the state budget could stand to be cut?" Most said health costs, reflecting an awareness of the crippling growth in Medicaid, followed, somewhat surprisingly, by "economic development expenditures" – an area of state spending that almost exclusively goes to big business and the few companies located in Empire Zones.
The Small-Business ConditionsSM reports are developed from surveys of small-business owners in 26 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 York Small-Business ConditionsSM | ||||||
| This chart shows the results from New York and its comparative standing among selected nearby states. | ||||||
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 0 | 7 | 15 | 11 | 22 |
| Prior qtr. | 3 | 14 | 13 | 15 | 23 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 22 | 39 | 33 | 38 | 30 |
| Prior qtr. | 17 | 33 | 33 | 36 | 29 | |
| Net % "improving" | 5/2005 | 0 | 8 | 12 | 13 | 0 |
| Prior qtr. | 7 | 13 | 12 | 12 | 15 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 47 | 60 | 60 | 57 | 43 |
| Prior qtr. | 56 | 67 | 62 | 54 | 63 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 48 | 47 | 41 | 39 | 37 |
| Prior qtr. | 63 | 56 | 47 | 40 | 39 | |
| % Lower costs | 5/2005 | 4 | 2 | 6 | 2 | 1 |
| Prior qtr. | 2 | 2 | 4 | 7 | 2 | |
| % Price increases | 5/2005 | 3 | 7 | 4 | 3 | 4 |
| Prior qtr. | 4 | 3 | 3 | 1 | 3 | |
| % Greater productivity | 5/2005 | 13 | 19 | 10 | 11 | 18 |
| Prior qtr. | 10 | 11 | 16 | 18 | 18 | |
| % Government policy | 5/2005 | 4 | 4 | 2 | 6 | 4 |
| Prior qtr. | 2 | 3 | 3 | 5 | 4 | |
| % Seasonal/Weather | 5/2005 | 8 | 7 | 13 | 14 | 12 |
| Prior qtr. | - | - | - | - | - | |
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Cost increases | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Pressure on selling prices | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Lower productivity | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Government policies | 5/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 31 | 47 | 39 | 34 | 35 |
| Prior qtr. | 25 | 40 | 35 | 29 | 36 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 10 | 29 | 26 | 21 | 21 |
| Prior qtr. | 12 | 18 | 18 | 16 | 20 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 21 | 16 | 17 | 22 | 19 |
| Prior qtr. | 22 | 22 | 19 | 23 | 19 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 16 | 15 | 15 | 16 | 15 |
| Prior qtr. | 29 | 22 | 17 | 13 | 16 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 45 | 46 | 51 | 49 | 51 |
| Prior qtr. | 56 | 50 | 53 | 45 | 45 | |
| % Benefits | 5/2005 | 31 | 28 | 23 | 32 | 31 |
| Prior qtr. | 28 | 32 | 33 | 35 | 36 | |
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 41 | 42 | 38 | 43 |
| Prior qtr. | 47 | 47 | 41 | 41 | 40 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 40 | 39 | 41 | 37 | 42 |
| Prior qtr. | 45 | 43 | 42 | 41 | 41 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 35 | 34 | 35 | 34 | 40 |
| Prior qtr. | 42 | 45 | 37 | 37 | 35 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 45 | 47 | 51 | 51 | 52 |
| Prior qtr. | 54 | 63 | 61 | 53 | 57 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 35 | 46 | 36 | 40 | 43 |
| Prior qtr. | 34 | 41 | 35 | 39 | 37 | |
| % All credit needs not satisfied | 5/2005 | 6 | 3 | 7 | 5 | 4 |
| Prior qtr. | 12 | 8 | 9 | 7 | 6 | |
| % No credit needs | 5/2005 | 50 | 45 | 51 | 46 | 45 |
| Prior qtr. | 47 | 47 | 51 | 50 | 53 | |
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 54 | 52 | 50 | 50 | 59 |
| Prior qtr. | 56 | 60 | 48 | 47 | 51 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 14 | 15 | 18 | 18 | 18 |
| Prior qtr. | 16 | 22 | 17 | 12 | 20 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 11 | 10 | 9 | 13 | 11 |
| Prior qtr. | 17 | 13 | 11 | 12 | 9 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 11 | 14 | 13 | 12 | 13 |
| Prior qtr. | 11 | 9 | 10 | 10 | 10 | |
| % Taxes | 5/2005 | 11 | 12 | 10 | 9 | 11 |
| Prior qtr. | 16 | 11 | 9 | 11 | 12 | |
| % Employee quality/costs | 5/2005 | 8 | 9 | 9 | 8 | 10 |
| Prior qtr. | 9 | 14 | 10 | 8 | 11 | |
| % Insurance | 5/2005 | 16 | 19 | 17 | 20 | 19 |
| Prior qtr. | 17 | 21 | 22 | 22 | 18 | |
| % Big-business competition | 5/2005 | 14 | 11 | 14 | 13 | 13 |
| Prior qtr. | 14 | 15 | 17 | 17 | 15 | |
| % Inflation/Rising prices | 5/2005 | 10 | 12 | 11 | 10 | 13 |
| Prior qtr. | 11 | 5 | 11 | 6 | 7 | |
| % Credit availability/Interest rates | 5/2005 | 1 | 3 | 3 | 3 | 3 |
| Prior qtr. | 5 | 2 | 2 | 4 | 3 | |
| % Regulations/Red tape | 5/2005 | 7 | 7 | 7 | 8 | 7 |
| Prior qtr. | 7 | 9 | 9 | 7 | 10 | |
* Insufficient cases
| New York Quarterly Spotlight | |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 7% |
| Workers' compensation | 14% |
| Product or professional liability | 13% |
| Property and casualty | 10% |
| Employee health | 27% |
| Don't know/refused | 29% |
| Total | 100% |
| In what general area of the state budget are reductinos most warranted? | |
| Education | 11% |
| Transpotation and roads | 8% |
| Economic development | 13% |
| Health | 17% |
| Public welfare | 12% |
| Police and corrections | 4% |
| Other | 5% |
| Don't know/refused | 30% |
| Total | 100% |
The Poll
NFIB’s New York Small-Business ConditionsSM is a telephone survey of a random sample of New York 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.
