Release Date: 12/ 01/ 2005
CONTACT: Mark Alesse, (518) 434-1262 or Jim Jennings, (202) 645-4099
Energy Costs Now Rank With Insurance as Top Business Headache
NEW YORK -- New York's small-business owners still have a negative outlook for New York's business climate, with a net negative one percent saying the state is "supportive of small business," according to the New York Small-Business ConditionsSM. The report's data, which was released today by the National Federation of Independent Business/New York, provides an overview of small-business conditions within New York and compares them with neighboring states.
"New York's business owners contend with one of the most expensive business climates in the country. It's no wonder they have a sour outlook," said Mark Alesse, state director of NFIB/New York.
A net 17 percent of the state's small employers believed business conditions in their market area are "good," a significant drop from the third quarter's 29 percent. Worse yet, with winter approaching, they do not see conditions improving. A net negative 6 percent reported improving conditions compared to the third quarter's 9 percent. Alesse noted a big reason for that pessimism could be energy costs. "Energy costs today rank up there with insurance as the costs rising most rapidly," said Alesse. He added that materials costs are also rising quickly.
Most troubling is that both sales and profits have turned south, according to the survey. Only a net 13 percent reported profits were "good," a drop from a net 26 percent in the third quarter. A net 34 percent reported "good" sales, compared to the third quarter's 42 percent. Adding to their problems, a net 68 percent reported their purchasing prices going up, compared to 55 percent in the third quarter.
When asked to rank their most important business problem, New York small-business owners ranked insurance, followed by taxes and inflation/rising prices.
| 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 | 11/2005 | -1 | 13 | 20 | 5 | 7 |
| Prior qtr. | 12 | 6 | 11 | 11 | 10 | |
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 17 | 35 | 34 | 33 | 25 |
| Prior qtr. | 29 | 29 | 41 | 43 | 30 | |
| Net % "improving" | 11/2005 | -6 | 10 | 4 | 2 | -1 |
| Prior qtr. | 9 | 7 | 6 | 7 | 1 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 48 | 57 | 60 | 49 | 46 |
| Prior qtr. | 53 | 57 | 62 | 62 | 52 | |
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 40 | 46 | 49 | 54 | 45 |
| Prior qtr. | 47 | 47 | 45 | 42 | 41 | |
| % Lower costs | 11/2005 | 6 | 5 | 5 | 4 | 5 |
| Prior qtr. | 3 | 4 | 3 | 3 | 4 | |
| % Price increases | 11/2005 | 8 | 6 | 4 | 5 | 6 |
| Prior qtr. | 7 | 6 | 3 | 5 | 5 | |
| % Greater productivity | 11/2005 | 15 | 16 | 14 | 12 | 11 |
| Prior qtr. | 13 | 10 | 14 | 15 | 12 | |
| % Government policy | 11/2005 | 3 | 2 | 6 | 5 | 5 |
| Prior qtr. | 5 | 4 | 2 | 3 | 3 | |
| % Seasonal/Weather | 11/2005 | 9 | 8 | 5 | 7 | 12 |
| Prior qtr. | 7 | 5 | 12 | 10 | 9 | |
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Cost increases | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Pressure on selling prices | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Lower productivity | 11/2005 | IC | IC | IC | IC | IC |
| Prior qtr. | IC | IC | IC | IC | IC | |
| % Government policy | 11/2005 | 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" | 11/2005 | 34 | 43 | 39 | 39 | 37 |
| Prior qtr. | 42 | 38 | 48 | 42 | 43 | |
| Profits | ||||||
| Net % profits "good" | 11/2005 | 13 | 29 | 24 | 22 | 17 |
| Prior qtr. | 26 | 13 | 32 | 31 | 22 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 20 | 19 | 22 | 19 | 18 |
| Prior qtr. | 23 | 22 | 23 | 22 | 21 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 17 | 19 | 10 | 20 | 17 |
| Prior qtr. | 19 | 15 | 16 | 17 | 21 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 50 | 49 | 46 | 49 | 42 |
| Prior qtr. | 48 | 47 | 47 | 49 | 44 | |
| % Benefits | 11/2005 | 30 | 27 | 35 | 36 | 36 |
| Prior qtr. | 29 | 35 | 35 | 33 | 36 | |
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 48 | 41 | 40 | 42 | 41 |
| Prior qtr. | 46 | 41 | 41 | 46 | 38 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 46 | 41 | 37 | 41 | 47 |
| Prior qtr. | 46 | 41 | 41 | 41 | 38 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 44 | 43 | 36 | 43 | 40 |
| Prior qtr. | 43 | 34 | 38 | 40 | 38 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 55 | 53 | 53 | 50 | 52 |
| Prior qtr. | 55 | 58 | 52 | 53 | 50 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 40 | 39 | 35 | 35 | 37 |
| Prior qtr. | 32 | 31 | 40 | 35 | 37 | |
| % All credit needs not satisfied | 11/2005 | 10 | 9 | 9 | 11 | 8 |
| Prior qtr. | 10 | 10 | 5 | 6 | 4 | |
| % No credit needs | 11/2005 | 45 | 48 | 50 | 51 | 49 |
| Prior qtr. | 54 | 53 | 49 | 52 | 52 | |
| N.Y. | Conn. | Mass. | N.J. | Pa. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 68 | 60 | 53 | 58 | 63 |
| Prior qtr. | 55 | 58 | 55 | 50 | 59 | |
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 24 | 25 | 22 | 21 | 20 |
| Prior qtr. | 18 | 14 | 14 | 18 | 18 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 12 | 14 | 10 | 10 | 7 |
| Prior qtr. | 11 | 10 | 10 | 9 | 10 | |
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 10 | 9 | 10 | 11 | 9 |
| Prior qtr. | 11 | 9 | 9 | 9 | 9 | |
| % Taxes | 11/2005 | 15 | 11 | 12 | 13 | 11 |
| Prior qtr. | 15 | 16 | 8 | 10 | 15 | |
| % Employee quality/costs | 11/2005 | 9 | 11 | 10 | 9 | 8 |
| Prior qtr. | 7 | 7 | 11 | 8 | 7 | |
| % Insurance | 11/2005 | 16 | 17 | 17 | 15 | 17 |
| Prior qtr. | 15 | 17 | 19 | 21 | 18 | |
| % Big-business competition | 11/2005 | 10 | 14 | 12 | 13 | 15 |
| Prior qtr. | 13 | 14 | 13 | 15 | 14 | |
| % Inflation/Rising prices | 11/2005 | 12 | 14 | 15 | 11 | 14 |
| Prior qtr. | 10 | 12 | 15 | 13 | 13 | |
| % Credit availability/Interest rates | 11/2005 | 3 | 4 | 5 | 3 | 3 |
| Prior qtr. | 3 | 3 | 4 | 2 | 3 | |
| % Regulations/Red tape | 11/2005 | 8 | 6 | 5 | 8 | 9 |
| Prior qtr. | 8 | 8 | 6 | 9 | 7 | |
* Insufficient cases
| New York Quarterly Spotlight | |
| In general, how satisfied are you with the direction that New York is headed? | |
| Very satisfied | 8% |
| Somewhat satisfied | 41% |
| Not too satisfied | 25% |
| Not at all satisfied | 21% |
| Don't' know | 3% |
| Don't know/refused | 2% |
| Total | 100% |
| Which of your total costs are rising most rapidly? | |
| Energy | 30% |
| Labor | 13% |
| Insurance | 30% |
| Materials | 15% |
| Some other | 4% |
| None rising rapidly | 3% |
| Don't know | 4% |
| Refused | 2% |
| 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.
