Release Date: 03/ 01/ 2005
CONTACT: Ty Pine, (614) 221-4107 or Kevin Walter, (614) 221-4107.
Small businesses optimistic despite decimating cost challenges
While Ohio’s overall business climate and outlook are on par for the region, the potential for continued job exodus remains, according to the inaugural Ohio Small-Business ConditionsSM report released today by the National Federation of Independent Business (NFIB)/Ohio. The new report provides an overview of small-business conditions within Ohio and compares them to Indiana, Michigan and Pennsylvania.
“Ohio small-business owners are feeling the pinch from high tax burdens and insurance costs,” said Ty Pine, NFIB/Ohio state director. “A lack of action by elected officials on tax and spending reform, providing more flexibility in the health insurance market, and controlling workers’ compensation costs continue to slow Ohio’s recovery from the economic downturn.”
Only a net 34 percent of the state’s small employers believe the business climate is good in Ohio. While this is comparable with other Midwestern states, Ohio ranks among the bottom five in the 26 states surveyed on business climate issues. A net 68 percent have a positive outlook for the next three months.
Not surprising in the study was the fact that health insurance and workers’ compensation premiums are increasing most rapidly. Thirty-eight percent of respondents cited health insurance premiums as the most rapidly rising while 13 percent cited workers’ compensation.
The Small-Business ConditionsSM reports are developed from surveys of small-business owners in 26 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. Visit www.NFIB.com/OH for information about NFIB’s activities in Ohio. For information about the Small-Business ConditionsSM project and other small-business research studies conducted by NFIB Research Foundation, visit www.NFIB.com/research.
| Ohio Small-Business ConditionsSM | ||||||
| This chart shows the results from Ohio and its comparative standing among selected states in the region. | ||||||
| Ohio | Ind. | Mich. | Pa. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 27 | 21 | 18 | 23 | |
| Prior qtr. | - | - | - | - | ||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 34 | 31 | 15 | 29 | |
| Prior qtr. | - | - | - | - | ||
| Net % "improving" | 2/2005 | 17 | 15 | 16 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 68 | 63 | 55 | 63 | |
| Prior qtr. | - | - | - | - | ||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 39 | 55 | 45 | 39 | |
| Prior qtr. | - | - | - | - | ||
| % Lower costs | 2/2005 | 3 | 3 | 3 | 2 | |
| Prior qtr. | - | - | - | - | ||
| % Price increases | 2/2005 | 5 | 2 | 2 | 3 | |
| Prior qtr. | - | - | - | - | ||
| % Greater productivity | 2/2005 | 19 | 17 | 14 | 18 | |
| Prior qtr. | - | - | - | - | ||
| % Government policy | 2/2005 | 4 | 2 | 3 | 4 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 8 | 15 | 13 | 11 | |
| Prior qtr. | - | - | - | - | ||
| % Cost increases | 2/2005 | 0 | 5 | 9 | 5 | |
| Prior qtr. | - | - | - | - | ||
| % Pressure on selling prices | 2/2005 | 8 | 0 | 4 | 11 | |
| Prior qtr. | - | - | - | - | ||
| % Lower productivity | 2/2005 | 0 | 10 | 9 | 0 | |
| Prior qtr. | - | - | - | - | ||
| % Government policies | 2/2005 | 25 | 35 | 26 | 42 | |
| Prior qtr. | - | - | - | - | ||
| Ohio | Ind. | Mich. | Pa. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 36 | 28 | 21 | 36 | |
| Prior qtr. | - | - | - | - | ||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 20 | 7 | 4 | 20 | |
| Prior qtr. | - | - | - | - | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 20 | 20 | 13 | 19 | |
| Prior qtr. | - | - | - | - | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 10 | 17 | 12 | 16 | |
| Prior qtr. | - | - | - | - | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 52 | 52 | 49 | 45 | |
| Prior qtr. | - | - | - | - | ||
| % Benefits | 2/2005 | 31 | 33 | 31 | 36 | |
| Prior qtr. | - | - | - | - | ||
| Ohio | Ind. | Mich. | Pa. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 43 | 40 | 45 | 40 | |
| Prior qtr. | - | - | - | - | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 42 | 42 | 41 | 41 | |
| Prior qtr. | - | - | - | - | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 37 | 36 | 41 | 35 | |
| Prior qtr. | - | - | - | - | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 57 | 60 | 59 | 57 | |
| Prior qtr. | - | - | - | - | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 39 | 37 | 36 | 37 | |
| Prior qtr. | - | - | - | - | ||
| % All credit needs not satisfied | 2/2005 | 7 | 11 | 10 | 6 | |
| Prior qtr. | - | - | - | - | ||
| % No credit needs | 2/2005 | 50 | 48 | 49 | 53 | |
| Prior qtr. | - | - | - | - | ||
| Ohio | Ind. | Mich. | Pa. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 46 | 58 | 60 | 51 | |
| Prior qtr. | - | - | - | - | ||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 13 | 16 | 17 | 20 | |
| Prior qtr. | - | - | - | - | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 8 | 12 | 11 | 9 | |
| Prior qtr. | - | - | - | - | ||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 11 | 11 | 13 | 10 | |
| Prior qtr. | - | - | - | - | ||
| % Taxes | 2/2005 | 11 | 13 | 13 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Employee quality/costs | 2/2005 | 8 | 11 | 7 | 11 | |
| Prior qtr. | - | - | - | - | ||
| % Insurance | 2/2005 | 14 | 16 | 17 | 18 | |
| Prior qtr. | - | - | - | - | ||
| % Big-business competition | 2/2005 | 15 | 15 | 13 | 15 | |
| Prior qtr. | - | - | - | - | ||
| % Inflation/Rising prices | 2/2005 | 13 | 12 | 11 | 7 | |
| Prior qtr. | - | - | - | - | ||
| % Credit availability/Interest rates | 2/2005 | 2 | 5 | 3 | 3 | |
| Prior qtr. | - | - | - | - | ||
| % Regulations/Red tape | 2/2005 | 10 | 7 | 6 | 10 | |
| Prior qtr. | - | - | - | - | ||
| Ohio Quarterly Spotlight | |
| Have higher energy prices experienced over the last year or so imposed a very serious, somewhat serious, not too serious, or not at all serious burden on your business? | |
| Very serious | 13% |
| Somewhat serious | 31% |
| Not too serious | 28% |
| Not at all serious | 20% |
| Don't know/Refused | 7% |
| Total | 100% |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 11% |
| Workers' compensation | 13% |
| Product or professional liability | 7% |
| Property or casualty | 9% |
| Employee health | 38% |
| Don't know/Refused | 22% |
| Total | 100% |
The Poll
NFIB’s Ohio Small-Business ConditionsSM is a telephone survey of a random sample of Ohio 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.
