Release Date: 09/ 01/ 2005
CONTACT: Rob Ikard, (615) 872-5855 or Jim Brown, (615) 874-5288
Tennessee’s Small-Business Owners Shed Light on Role of Immigrant Labor
NASHVILLE, Tenn. -- Business conditions showed signs of weakening in Tennessee, 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 40 percent (positive percent minus negative percent) of respondents said business conditions are “good,” down from June’s net 44 percent and a net 47 percent in the March report. Tennessee’s reading trailed Virginia’s (net 62 percent), Georgia’s (net 52 percent), Missouri’s (net 44 percent) and North Carolina’s (net 43 percent). Only a net 5 percent of respondents reported that business conditions are “improving,” down from a net 21 percent in March and net 14 percent in June.
“The data from NFIB/Tennessee’s Small-Business ConditionsSM indicates our business climate, while still relatively robust, is not as healthy as it was earlier this year,” NFIB/Tennessee State Director Rob Ikard said. “Tennessee’s economy appears to be losing some momentum, though some of the weakness may be due to seasonal reasons. While the trend is a concern, conditions for small business in Tennessee are still pretty good overall.”
Ikard noted a net 55 percent of respondents said average prices paid for goods and services “increased,” up from a net 52 percent and net 49 percent the previous two quarters, respectively. He also highlighted that only a net 12 percent were able to increase selling prices, down from a net 17 percent the previous two quarters. Both readings appear to indicate that rising gas costs, among other items, may be pressuring more small businesses. Fifteen percent reported higher per employee compensation costs. Despite declines in some of the indicators, small-business owners (a net 61 percent) said business prospects over the next several months look “good.”
Forty-one percent of respondents believe immigrant labor is “important” to businesses in their area while 47 percent believe it isn't. Regarding roles, 30 percent said immigrant labor “fills jobs that otherwise wouldn't be filled,” 27 percent said immigrant workers have “no appreciable role,” 12 percent said immigrant labor “crowds out American workers” and 8 percent said immigrants “provide skills not otherwise available.”
Tennessee small-business owners reported their single most important business problem is insurance (19 percent), followed by taxes, and inflation and rising prices (both 13 percent).
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 | 37 | 28 | 38 | 41 |
| Prior qtr. | 32 | 36 | 29 | 42 | 32 | |
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 40 | 52 | 44 | 43 | 62 |
| Prior qtr. | 44 | 45 | 43 | 44 | 48 | |
| Net % "improving" | 5/2005 | 6 | 25 | 11 | 14 | 27 |
| Prior qtr. | 14 | 26 | 15 | 25 | 20 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 62 | 67 | 66 | 65 | 73 |
| Prior qtr. | 61 | 64 | 62 | 65 | 69 | |
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 37 | 51 | 43 | 43 | 49 |
| Prior qtr. | 45 | 40 | 42 | 39 | 42 | |
| % Lower costs | 5/2005 | 3 | 5 | 4 | 2 | 2 |
| Prior qtr. | 2 | 6 | 2 | 3 | 4 | |
| % Price increases | 5/2005 | 4 | 1 | 3 | 4 | 2 |
| Prior qtr. | 2 | 6 | 5 | 4 | 3 | |
| % Greater productivity | 5/2005 | 16 | 11 | 12 | 18 | 9 |
| Prior qtr. | 15 | 13 | 16 | 12 | 15 | |
| % Government policy | 5/2005 | 4 | 6 | 6 | 4 | 5 |
| Prior qtr. | 4 | 6 | 4 | 4 | 4 | |
| % Seasonal/Weather | 5/2005 | 10 | 8 | 11 | 9 | 10 |
| 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 | 41 | 52 | 46 | 50 | 56 |
| Prior qtr. | 36 | 42 | 45 | 45 | 50 | |
| Profits | ||||||
| Net % profits "good" | 5/2005 | 27 | 35 | 27 | 32 | 37 |
| Prior qtr. | 24 | 28 | 24 | 32 | 33 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 20 | 23 | 20 | 15 | 26 |
| Prior qtr. | 15 | 18 | 19 | 19 | 21 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 15 | 15 | 13 | 17 | 19 |
| Prior qtr. | 13 | 12 | 16 | 12 | 18 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 59 | 55 | 58 | 54 | 58 |
| Prior qtr. | 53 | 60 | 54 | 57 | 61 | |
| % Benefits | 5/2005 | 24 | 23 | 24 | 28 | 27 |
| Prior qtr. | 29 | 21 | 26 | 24 | 25 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 41 | 46 | 42 | 44 | 43 |
| Prior qtr. | 40 | 43 | 46 | 34 | 41 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 36 | 40 | 43 | 39 |
| Prior qtr. | 38 | 36 | 43 | 42 | 43 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 42 | 38 | 42 | 39 |
| Prior qtr. | 36 | 40 | 35 | 41 | 37 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 49 | 61 | 54 | 52 | 47 |
| Prior qtr. | 56 | 49 | 49 | 49 | 51 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 35 | 39 | 39 | 39 | 37 |
| Prior qtr. | 43 | 43 | 41 | 39 | 43 | |
| % All credit needs not satisfied | 5/2005 | 6 | 5 | 6 | 5 | 7 |
| Prior qtr. | 5 | 7 | 5 | 7 | 6 | |
| % No credit needs | 5/2005 | 53 | 52 | 47 | 52 | 50 |
| Prior qtr. | 47 | 42 | 45 | 48 | 45 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 58 | 55 | 58 | 54 | 56 |
| Prior qtr. | 52 | 49 | 53 | 51 | 50 | |
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 13 | 17 | 18 | 14 | 18 |
| Prior qtr. | 17 | 15 | 20 | 15 | 16 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 10 | 13 | 13 | 9 | 13 |
| Prior qtr. | 11 | 10 | 11 | 11 | 11 | |
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 8 | 11 | 9 | 9 | 8 |
| Prior qtr. | 10 | 13 | 12 | 10 | 12 | |
| % Taxes | 5/2005 | 13 | 13 | 9 | 13 | 12 |
| Prior qtr. | 11 | 13 | 12 | 10 | 11 | |
| % Employee quality/costs | 5/2005 | 10 | 13 | 12 | 10 | 13 |
| Prior qtr. | 9 | 12 | 7 | 8 | 9 | |
| % Insurance | 5/2005 | 19 | 12 | 20 | 17 | 12 |
| Prior qtr. | 15 | 11 | 19 | 17 | 12 | |
| % Big-business competition | 5/2005 | 11 | 15 | 13 | 14 | 17 |
| Prior qtr. | 15 | 11 | 12 | 14 | 18 | |
| % Inflation/Rising prices | 5/2005 | 13 | 12 | 13 | 12 | 15 |
| Prior qtr. | 14 | 16 | 13 | 16 | 14 | |
| % Credit availability/Interest rates | 5/2005 | 2 | 2 | 4 | 3 | 3 |
| Prior qtr. | 4 | 3 | 3 | 2 | 3 | |
| % Regulations/Red tape | 5/2005 | 8 | 9 | 6 | 8 | 6 |
| Prior qtr. | 8 | 7 | 8 | 5 | 6 | |
* Insufficient cases
| Tennessee Quarterly Spotlight | |
| How important is immigrant labor to businesses in your area? Is it very important, somewhat important, not too important or not at all important? | |
| Very important | 17% |
| Somewhat important | 24% |
| Not too important | 19% |
| Not at all important | 28% |
| Don't know/Refused | 13% |
| Total | 100% |
| Which best describes the role immigrant labor plays in your area? | |
| Provides skills not otherwise available | 8% |
| Fills jobs that otherwise wouldn't be filled | 30% |
| Crowds out American workers | 12% |
| No appreciable role | 27% |
| Don't know/Refused | 23% |
| 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.
