Release Date: 12/ 01/ 2005
CONTACT: Kevin Shivers, (717) 232-8582 or Jim Jennings, (240) 645-4099
Among neighboring states, only small-business owners in New Jersey, New York have more pessimistic view of conditions
HARRISBURG, Pa. -- Pennsylvania's overall small-business climate continued its year-long decline according to the Pennsylvania Small-Business ConditionsSM November survey. The report's data – released today by the Pennsylvania chapter of the National Federation of Independent Business – provides an overview of small-business conditions in Pennsylvania and compares them with neighboring states: Maryland, Ohio, New Jersey and New York.
"A net 7 percent of small job creators told us Pennsylvania's business environment supports their efforts," said NFIB State Director Kevin Shivers. "Among neighboring states, only small-business owners in New Jersey and New York have a more pessimistic view of their business environment. Small employers' views of support in Pennsylvania have declined steadily since March, when a net 23 percent reported Pennsylvania supported their efforts."
A net 25 percent of small employers (percent positive minus percent negative) believed business conditions in their market area were good – down 5 percent from the September report. Less than half of job creators, 46 percent, reported a better outlook for business over the next three months – down 6 percent – and worst among neighboring states.
Small-business hiring is down – a net 18-percent reported "one or more" current job openings. Over the same three-month period, 47 percent of small-business owners made capital expenditures. A net 41 percent reported upgrading technology, and 40 percent reported expenditures for employee training.
Of those surveyed, only a net 17 percent indicated that profits were "good," down from 22 percent in September. A net 37 percent characterized sales as "good." Overall, a net 63 percent of small employers reported rising purchasing prices over the last three months, with 29 percent reporting energy costs rising most rapidly. A net 20 percent reported they had increased their own selling prices during the same period. The survey indicated that insurance, big-business competition and rising prices were the most important problems facing small-business owners in Pennsylvania.
Small businesses are the driving force behind the Pennsylvania and national economies. According to the state Labor Department, 98 percent of all Pennsylvania businesses employ fewer than 100 workers. These businesses account for 52 percent of all jobs in the state.
| Pennsylvania Small-Business ConditionsSM | ||||||
| This chart shows the results from Pennsylvania and its comparative standing among selected nearby states. | ||||||
| Pa. | Md. | N.J. | N.Y. | Ohio | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 11/2005 | 7 | 25 | 5 | -1 | 11 |
| Prior qtr. | 10 | 21 | 11 | 12 | 11 | |
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 25 | 56 | 33 | 17 | 15 |
| Prior qtr. | 30 | 53 | 43 | 29 | 20 | |
| Net % "improving" | 11/2005 | -1 | 15 | 2 | -6 | -5 |
| Prior qtr. | 1 | 16 | 7 | 9 | 2 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 46 | 66 | 49 | 48 | 51 |
| Prior qtr. | 52 | 65 | 62 | 53 | 49 | |
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 45 | 57 | 54 | 40 | 46 |
| Prior qtr. | 41 | 43 | 42 | 47 | 50 | |
| % Lower costs | 11/2005 | 5 | 4 | 4 | 6 | 4 |
| Prior qtr. | 4 | 5 | 3 | 3 | 4 | |
| % Price increases | 11/2005 | 6 | 3 | 5 | 8 | 1 |
| Prior qtr. | 5 | 5 | 5 | 7 | 2 | |
| % Greater productivity | 11/2005 | 11 | 13 | 12 | 15 | 13 |
| Prior qtr. | 12 | 14 | 15 | 13 | 12 | |
| % Government policy | 11/2005 | 5 | 2 | 5 | 3 | 4 |
| Prior qtr. | 3 | 5 | 3 | 5 | 3 | |
| % Seasonal/Weather | 11/2005 | 12 | 5 | 7 | 9 | 15 |
| Prior qtr. | 9 | 8 | 10 | 7 | 8 | |
| 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 | |
| Pa. | Md. | N.J. | N.Y. | Ohio | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 37 | 52 | 39 | 34 | 37 |
| Prior qtr. | 43 | 49 | 42 | 42 | 34 | |
| Profits | ||||||
| Net % profits "good" | 11/2005 | 17 | 39 | 22 | 13 | 13 |
| Prior qtr. | 22 | 33 | 31 | 26 | 13 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 18 | 25 | 19 | 20 | 17 |
| Prior qtr. | 21 | 22 | 22 | 23 | 17 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 17 | 22 | 20 | 17 | 15 |
| Prior qtr. | 21 | 17 | 17 | 19 | 12 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 42 | 56 | 49 | 50 | 54 |
| Prior qtr. | 44 | 53 | 49 | 48 | 50 | |
| % Benefits | 11/2005 | 36 | 29 | 36 | 30 | 32 |
| Prior qtr. | 36 | 27 | 33 | 29 | 33 | |
| Pa. | Md. | N.J. | N.Y. | Ohio | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 41 | 46 | 42 | 48 | 42 |
| Prior qtr. | 38 | 45 | 46 | 46 | 40 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 47 | 47 | 41 | 46 | 46 |
| Prior qtr. | 38 | 40 | 41 | 46 | 40 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 40 | 46 | 43 | 44 | 41 |
| Prior qtr. | 38 | 42 | 40 | 43 | 39 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 52 | 60 | 50 | 55 | 55 |
| Prior qtr. | 50 | 51 | 53 | 55 | 50 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 37 | 42 | 35 | 40 | 39 |
| Prior qtr. | 37 | 37 | 35 | 32 | 37 | |
| % All credit needs not satisfied | 11/2005 | 8 | 5 | 11 | 10 | 6 |
| Prior qtr. | 4 | 6 | 6 | 10 | 6 | |
| % No credit needs | 11/2005 | 49 | 47 | 51 | 45 | 52 |
| Prior qtr. | 52 | 49 | 52 | 54 | 51 | |
| Pa. | Md. | N.J. | N.Y. | Ohio | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 63 | 55 | 58 | 68 | 62 |
| Prior qtr. | 59 | 49 | 50 | 55 | 55 | |
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 20 | 25 | 21 | 24 | 18 |
| Prior qtr. | 18 | 18 | 18 | 18 | 16 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 7 | 12 | 10 | 12 | 13 |
| Prior qtr. | 10 | 12 | 9 | 11 | 8 | |
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 9 | 7 | 11 | 10 | 11 |
| Prior qtr. | 9 | 7 | 9 | 11 | 13 | |
| % Taxes | 11/2005 | 11 | 10 | 13 | 15 | 13 |
| Prior qtr. | 15 | 9 | 10 | 15 | 18 | |
| % Employee quality/costs | 11/2005 | 8 | 15 | 9 | 9 | 7 |
| Prior qtr. | 7 | 12 | 8 | 7 | 8 | |
| % Insurance | 11/2005 | 17 | 16 | 15 | 16 | 16 |
| Prior qtr. | 18 | 16 | 21 | 15 | 13 | |
| % Big-business competition | 11/2005 | 15 | 14 | 13 | 10 | 11 |
| Prior qtr. | 14 | 14 | 15 | 13 | 14 | |
| % Inflation/Rising prices | 11/2005 | 14 | 13 | 11 | 12 | 19 |
| Prior qtr. | 13 | 11 | 13 | 10 | 12 | |
| % Credit availability/Interest rates | 11/2005 | 3 | 4 | 3 | 3 | 3 |
| Prior qtr. | 3 | 4 | 2 | 3 | 3 | |
| % Regulations/Red tape | 11/2005 | 9 | 7 | 8 | 8 | 8 |
| Prior qtr. | 7 | 6 | 9 | 8 | 8 | |
* Insufficient cases
| Pennsylvania Quarterly Spotlight | |
| Which of your total costs are rising most rapidly? | |
| Energy | 29% |
| Labor | 13% |
| Insurance | 31% |
| Materials | 15% |
| Some other | 5% |
| None rising rapidly | 2% |
| Don't know | 5% |
| Refused | 1% |
| Total | 100% |
| Which of your total costs are rising next most rapidly? | |
| Energy | 23% |
| Labor | 11% |
| Insurance | 24% |
| Materials | 27% |
| Some other | 5% |
| None rising rapidly | 4% |
| Don't know | 3% |
| Refused | 3% |
| Total | 100% |
The Poll
NFIB’s Pennsylvania Small-Business ConditionsSM is a telephone survey of a random sample of Pennsylvania 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.
