Release Date: 06/ 01/ 2005
CONTACT: Rob Ikard, (615) 872-5855 or Jim Brown, (615) 874-5288
NFIB's Small-Business Conditions Survey: Small Businesses See Slight Decline for Prospects
TENNESSEE -- Tennessee's overall business climate remains good, according to this quarter's Tennessee Small-Business ConditionsSM. The report's data, which was released today by the National Federation of Independent Business/Tennessee, provides an overview of small-business conditions within Tennessee and compares them with neighboring states.
A net 44 percent (positive percent minus negative percent) of respondents said business conditions are "good," down slightly from last quarter's net 47 percent. That compared to a net 45 percent in Georgia, net 43 percent in Missouri, net 44 percent in North Carolina and a net 48 percent in Virginia. Tennessee's business environment improved slightly to a net 32 percent, up 1 percentage point from last quarter.
"The data from NFIB/Tennessee's Small-Business Conditions indicates business conditions are solid and our state's business environment is competitive with surrounding states," NFIB/Tennessee State Director Rob Ikard said. "Small-business owners appreciate that government and community leaders recognize that it's important to all Tennesseans that the entrepreneurial spirit is allowed to flourish across the Volunteer State."
Ikard expressed some caution from the data, however, noting a net 61 percent of small-business owners view prospects over the next three months as "good," down from last quarter's net 68 percent. Ikard said small businesses are experiencing greater price inflation but have not yet begun passing the higher prices along to customers. A net 52 percent saw purchasing prices rise, but only a net 17 percent, the same figure as last quarter, increased selling prices. Only a net 14 percent said business conditions are "improving," down from a net 21 percent last quarter.
"It would appear some kind of shift might be occurring," Ikard said. "The Sept. 1 readings will certainly be of interest to help small business discern if this is a trend or just a slight bump in the road."
Asked to single out their most important business problem, Tennessee small-business owners cited insurance (15 percent), big-business competition (15 percent), inflation and rising prices (14 percent, up two percentage points from last quarter) and taxes (11 percent).
Seventy-two percent said they are "very satisfied" or "somewhat satisfied" with the direction Tennessee is headed.
For information about the Small-Business ConditionsSM project and other small-business research studies conducted by the NFIB Research Foundation, visit www.NFIB.com/research.
| Tennessee Small-Business ConditionsSM | ||||||
| This chart shows the results from Tennessee and its comparative standing among selected nearby states. | ||||||
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | 32 | 36 | 29 | 42 | 32 |
| Prior qtr. | 31 | 37 | 30 | 36 | 35 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 44 | 45 | 43 | 44 | 48 |
| Prior qtr. | 47 | 52 | 43 | 38 | 53 | |
| Net % "improving" | 5/2005 | 14 | 26 | 15 | 25 | 20 |
| Prior qtr. | 21 | 30 | 21 | 27 | 24 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 61 | 64 | 62 | 65 | 69 |
| Prior qtr. | 68 | 73 | 70 | 70 | 71 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 45 | 40 | 42 | 39 | 42 |
| Prior qtr. | 46 | 41 | 50 | 57 | 43 | |
| % Lower costs | 5/2005 | 2 | 6 | 2 | 3 | 4 |
| Prior qtr. | 4 | 2 | 2 | 4 | 5 | |
| % Price increases | 5/2005 | 2 | 6 | 5 | 4 | 3 |
| Prior qtr. | 4 | 6 | 4 | 2 | 5 | |
| % Greater productivity | 5/2005 | 15 | 13 | 16 | 12 | 15 |
| Prior qtr. | 14 | 15 | 15 | 17 | 12 | |
| % Government policy | 5/2005 | 4 | 6 | 4 | 4 | 4 |
| Prior qtr. | 6 | 5 | 5 | 2 | 7 | |
| % Seasonal/Weather | 5/2005 | 15 | 8 | 13 | 12 | 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 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 36 | 42 | 45 | 45 | 50 |
| Prior qtr. | 41 | 43 | 39 | 39 | 46 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 24 | 28 | 24 | 32 | 33 |
| Prior qtr. | 27 | 26 | 23 | 24 | 31 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 15 | 18 | 19 | 19 | 21 |
| Prior qtr. | 16 | 20 | 17 | 20 | 27 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 13 | 12 | 16 | 12 | 18 |
| Prior qtr. | 15 | 18 | 25 | 16 | 14 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 53 | 60 | 54 | 57 | 61 |
| Prior qtr. | 58 | 57 | 59 | 57 | 61 | |
| % Benefits | 5/2005 | 29 | 21 | 26 | 24 | 25 |
| Prior qtr. | 24 | 27 | 29 | 24 | 25 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 40 | 43 | 46 | 34 | 41 |
| Prior qtr. | 41 | 43 | 39 | 41 | 42 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 38 | 36 | 43 | 42 | 43 |
| Prior qtr. | 40 | 39 | 44 | 47 | 36 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 36 | 40 | 35 | 41 | 37 |
| Prior qtr. | 31 | 43 | 38 | 48 | 41 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 56 | 49 | 49 | 49 | 51 |
| Prior qtr. | 56 | 58 | 55 | 58 | 52 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 43 | 43 | 41 | 39 | 43 |
| Prior qtr. | 36 | 35 | 38 | 40 | 43 | |
| % All credit needs not satisfied | 5/2005 | 5 | 7 | 5 | 7 | 6 |
| Prior qtr. | 5 | 7 | 6 | 6 | 5 | |
| % No credit needs | 5/2005 | 47 | 42 | 45 | 48 | 45 |
| Prior qtr. | 56 | 53 | 53 | 51 | 49 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 52 | 49 | 53 | 51 | 50 |
| Prior qtr. | 49 | 48 | 54 | 54 | 42 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 17 | 15 | 20 | 15 | 16 |
| Prior qtr. | 17 | 12 | 21 | 17 | 14 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 11 | 10 | 11 | 11 | 11 |
| Prior qtr. | 10 | 13 | 12 | 17 | 13 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 10 | 13 | 12 | 10 | 12 |
| Prior qtr. | 9 | 10 | 7 | 11 | 7 | |
| % Taxes | 5/2005 | 11 | 13 | 12 | 10 | 11 |
| Prior qtr. | 12 | 11 | 14 | 9 | 10 | |
| % Employee quality/costs | 5/2005 | 9 | 12 | 7 | 8 | 9 |
| Prior qtr. | 12 | 9 | 10 | 11 | 11 | |
| % Insurance | 5/2005 | 15 | 11 | 19 | 17 | 12 |
| Prior qtr. | 14 | 21 | 17 | 15 | 15 | |
| % Big-business competition | 5/2005 | 15 | 11 | 12 | 14 | 18 |
| Prior qtr. | 15 | 11 | 12 | 15 | 16 | |
| % Inflation/Rising prices | 5/2005 | 14 | 16 | 13 | 16 | 14 |
| Prior qtr. | 12 | 11 | 12 | 16 | 8 | |
| % Credit availability/Interest rates | 5/2005 | 4 | 3 | 3 | 2 | 3 |
| Prior qtr. | 4 | 4 | 4 | 4 | 6 | |
| % Regulations/Red tape | 5/2005 | 8 | 7 | 8 | 5 | 6 |
| Prior qtr. | 6 | 6 | 9 | 5 | 9 | |
* Insufficient cases
| Tennessee Quarterly Spotlight | |
| In general, how satisfied are you with the direction that Tennessee is headed? | |
| Very satisfied | 9% |
| Somewhat satisfied | 63% |
| Not too satisfied | 15% |
| Not at all satisfied | 7% |
| Don't know/Refused | 5% |
| Total | 100% |
| What do you value most in the area where you do business? | |
| Quality of life | 36% |
| Physical environment | 7% |
| Opportunity | 18% |
| Vibrance and vitality | 2% |
| My roots are here | 31% |
| Other | 1% |
| Don't know/Refused | 5% |
| Total | 100% |
The Poll
NFIB’s Tennessee Small-Business ConditionsSM is a telephone survey of a random sample of Tennessee 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.
