NFIB

Underlying Indicators Show a Strengthening Oregon Economy in Latest Survey
Release Date: 12/ 01/ 2005

CONTACT: J.L. Wilson, (503) 364-4450 or Tony Malandra, (415) 664-9685

Small-business owners also doing part to hold down inflation by absorbing energy costs

SALEM, Ore. -- Oregon's small-business owners do not feel a lot of support from the state's institutions, according to the latest quarterly Oregon Small-Business Conditions^SM report released today by the National Federation of Independent Business Research Foundation. But in spite of this, Oregon's small-business economy is moving along with some of the best states in the country.

NFIB conducts surveys in the nation's 26 largest-economy states. The survey begins by asking a general impression question: how supportive of Main Street firms is the state's business environment, which includes government, banks, the media and community groups. On this question, Oregon remained relatively unchanged, jumping from 13 percent the previous quarter to 14 net-percent-supportive in today's report. This places Oregon 17th among 26 states and miles ahead of neighboring Washington, 0 percent net support, or northern California, net 7 percent. Iowa led the nation with a net 37 percent.

The 22-question report also reveals some underlying strengths, demonstrating the Oregon economy's ability to shift into high gear. It ranked 11th in the nation in good business conditions in local market areas. Even better, Oregon ranked third in profits, fourth in sales, and sixth in sales prospects for the next three months. Complementing the latter are three other indicators that really get to the heart of measuring an economy. There was a 6 percent increase in the number of small- business owners who made expenditures the past three months to train employees; a 7 percent jump in capital expenditures; and a 9 percent jump in capital utilization.

"I attribute the positive numbers from this report to a combination of our state allowing small-business owners time to recover from an economically tumultuous period by holding the line on taxes and not burdening them with new regulations," said J.L. Wilson, state director for the 10,000-member NFIB/Oregon. "But even more credit goes to the wisdom of Oregon voters for defeating two ballot initiatives, Measures 28 and 30, that would have put a heavy yoke on the backs of Main Street businesses and made it impossible for them to pull the Oregon economy out of its muck and mire."

There is a characteristic separating a small-business owner from his or her counterpart in the corporate world, according to Wilson, and that was measured in a question new to this survey. When asked what they did to offset spikes in energy costs, 23 percent said the reduced energy use, 20 percent absorbed the cost with lower earnings, and 9 percent invested in energy-conserving equipment. "More than half of small-business owners opted not to pass on higher energy costs to their customers," said Wilson. "That would not have been the course of action at the corporate level."

Oregon Small-Business ConditionsSM
This chart shows the results from Oregon and its comparative standing among selected nearby states.
		Ore.	No. Calif.	Wash.
Business Climate	Survey Date
Overall state business environment
Net % supportive of small business	11/2005	14	7	0
	Prior qtr.	13	9	-1
Business conditions in market area
Net % "good"	11/2005	41	44	38
	Prior qtr.	41	44	42
Net % "improving"	11/2005	15	11	12
	Prior qtr.	12	16	19
Outlook for business
Net % "good" in next three months	11/2005	62	58	54
	Prior qtr.	64	66	67
Reason for optimism
% Sales prospects	11/2005	46	41	49
	Prior qtr.	44	42	44
% Lower costs	11/2005	3	4	4
	Prior qtr.	2	4	2
% Price increases	11/2005	3	5	2
	Prior qtr.	3	3	4
% Greater productivity	11/2005	12	14	12
	Prior qtr.	11	15	17
% Government policy	11/2005	2	4	4
	Prior qtr.	4	5	4
% Seasonal/Weather	11/2005	15	14	11
	Prior qtr.	12	7	8
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
		Ore.	No. Calif.	Wash.
Sales and earnings (last quarter)
Sales
Net % sales "good"	11/2005	51	44	45
	Prior qtr.	52	47	52
Profits
Net % profits "good"	11/2005	35	32	31
	Prior qtr.	34	31	32
Employment
Current job openings (one or more)
% "Yes"	11/2005	19	17	16
	Prior qtr.	17	23	21
Per employee payroll cost
Net % "risen"	11/2005	21	14	22
	Prior qtr.	25	13	20
Employee cost pressures (greater)
% Wages	11/2005	56	51	50
	Prior qtr.	53	52	53
% Benefits	11/2005	24	25	31
	Prior qtr.	28	25	29
		Ore.	No. Calif.	Wash.
Productivity
Upgraded technology/processes (last three months)
% "Yes"	11/2005	47	42	45
	Prior qtr.	45	46	42
Made capital expenditure(s)  (last three months)
% "Yes"	11/2005	50	40	44
	Prior qtr.	43	44	46
Made expenditure to train employee(s) (last three months)
% "Yes"	11/2005	47	36	43
	Prior qtr.	41	38	44
Capacity utilization - can increase sales 10% without new inputs
% "Yes"	11/2005	63	53	51
	Prior qtr.	54	54	53
Credit availability (last three months)
% All credit needs satisfied	11/2005	35	34	35
	Prior qtr.	39	36	36
% All credit needs not satisfied	11/2005	4	6	7
	Prior qtr.	7	8	5
% No credit needs	11/2005	55	51	55
	Prior qtr.	48	50	52
		Ore.	No. Calif.	Wash.
Prices
Purchasing prices (last three months)
Net % increased	11/2005	64	52	62
	Prior qtr.	55	48	52
Selling prices (last three months)
Net % increased	11/2005	27	24	23
	Prior qtr.	20	20	19
Miscellaneous
Involvement in start of another business
% "Yes"	11/2005	11	11	12
	Prior qtr.	13	10	11
Single most important business problem
% Weak sales	11/2005	11	9	12
	Prior qtr.	10	11	9
% Taxes	11/2005	9	10	14
	Prior qtr.	9	10	16
% Employee quality/costs	11/2005	14	12	12
	Prior qtr.	10	12	10
% Insurance	11/2005	15	15	10
	Prior qtr.	17	19	12
% Big-business competition	11/2005	9	13	9
	Prior qtr.	14	13	12
% Inflation/Rising prices	11/2005	17	10	15
	Prior qtr.	11	15	12
% Credit availability/Interest rates	11/2005	3	2	2
	Prior qtr.	3	3	1
% Regulations/Red tape	11/2005	8	9	12
	Prior qtr.	9	6	11

* Insufficient cases

Oregon Quarterly Spotlight
Which of your total costs are rising most rapidly?
Energy	20%
Labor	14%
Insurance	31%
Materials	27%
Some other	2%
None rising rapidly	3%
Don't know/Refused	4%
Total	100%
What is the single most important action you have already taken to offset rising energy costs?
Raised selling prices	14%
Invested in energy-conserving equipment or vehicles	9%
Reduced energy use	23%
Absorbed costs with lower earnings	20%
Reduced non-energy costs such as payroll	8%
Other	11%
Don't know/Refused	15%
Total	100%

 

The Poll
NFIB’s Oregon Small-Business Conditions^SM is a telephone survey of a random sample of Oregon 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.