Release Date: 12/ 01/ 2005
CONTACT: Jim Brown, (615) 874-5288
Small-Business Survey: Post Katrina, More Than Half Don't Have Emergency Disaster Plan in Place
NASHVILLE, Tenn. -- Inflation and rising prices are the single most important small-business problem today, 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.
In the wake of Hurricanes Katrina and Rita, inflation and rising prices were cited as the No. 1 problem by 22 percent of small-business respondents, up significantly from last quarter's 13 percent. Taxes (14 percent) and big-business competition (13 percent) were listed No. 2 and 3, while insurance faded significantly from the top perch – from 19 percent in September to 9 percent this quarter. Additionally, 65 percent of respondents said the average prices businesses paid for goods and services "increased," up from 58 percent in September. Twenty-three percent said they "increased" their average selling prices, up from 16 percent last quarter.
"While still relatively robust, Tennessee's economy is less healthy than it was earlier this year, and inflationary pressures have been a contributing factor," NFIB/Tennessee spokesperson Jim Brown said. "Small businesses are paying more for goods and services after this season's devastating hurricanes, and some have begun passing along these increases to customers. Whether this is short-term blip or a long-term trend is unclear, but without a doubt there's been a shift in momentum in our economy."
There was also good news from Tennessee's entrepreneurs: While most states showed declines, sales and profits in Tennessee rebounded. A net 47 percent (positive percent minus negative percent) said sales were "good," up from last quarter's net 41 percent, while a net 32 percent said profits "were" good, up from last quarter's net 27 percent. Tennessee favorable comparison this quarter and less favorable comparison last quarter may be due to seasonal issues.
Since Hurricanes Katrina and Rita, 19 percent of respondents have taken actions to prepare their business for any disaster that may strike, but only 44 percent said they have an emergency disaster plan that they have communicated to their employees.
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 | 11/2005 | 31 | 36 | 31 | 32 | 32 |
| Prior qtr. | 32 | 37 | 28 | 38 | 41 | |
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 43 | 46 | 45 | 38 | 53 |
| Prior qtr. | 40 | 52 | 44 | 43 | 62 | |
| Net % "improving" | 11/2005 | 9 | 14 | 5 | 10 | 18 |
| Prior qtr. | 6 | 25 | 11 | 14 | 27 | |
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 62 | 63 | 59 | 60 | 61 |
| Prior qtr. | 62 | 67 | 66 | 65 | 73 | |
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 51 | 45 | 49 | 45 | 56 |
| Prior qtr. | 37 | 51 | 43 | 43 | 49 | |
| % Lower costs | 11/2005 | 5 | 3 | 4 | 3 | 4 |
| Prior qtr. | 3 | 5 | 4 | 2 | 2 | |
| % Price increases | 11/2005 | 5 | 3 | 4 | 3 | 3 |
| Prior qtr. | 4 | 1 | 3 | 4 | 2 | |
| % Greater productivity | 11/2005 | 16 | 17 | 14 | 15 | 14 |
| Prior qtr. | 16 | 11 | 12 | 18 | 9 | |
| % Government policy | 11/2005 | 5 | 6 | 4 | 6 | 4 |
| Prior qtr. | 4 | 6 | 6 | 4 | 5 | |
| % Seasonal/Weather | 11/2005 | 5 | 8 | 8 | 12 | 9 |
| Prior qtr. | 10 | 8 | 11 | 9 | 10 | |
| 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 policies | 11/2005 | 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" | 11/2005 | 47 | 44 | 43 | 40 | 53 |
| Prior qtr. | 41 | 52 | 43 | 40 | 56 | |
| Profits | ||||||
| Net % profits "good" | 11/2005 | 32 | 28 | 24 | 24 | 33 |
| Prior qtr. | 27 | 35 | 24 | 24 | 37 | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 17 | 15 | 21 | 17 | 22 |
| Prior qtr. | 20 | 23 | 21 | 17 | 26 | |
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 15 | 14 | 19 | 14 | 10 |
| Prior qtr. | 15 | 15 | 13 | 17 | 19 | |
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 57 | 60 | 52 | 57 | 57 |
| Prior qtr. | 59 | 55 | 58 | 54 | 58 | |
| % Benefits | 11/2005 | 24 | 25 | 33 | 28 | 26 |
| Prior qtr. | 24 | 23 | 24 | 28 | 27 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 43 | 41 | 46 | 41 | 45 |
| Prior qtr. | 41 | 46 | 42 | 44 | 43 | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 47 | 41 | 45 | 43 | 41 |
| Prior qtr. | 39 | 36 | 40 | 43 | 41 | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 42 | 40 | 46 | 44 | 42 |
| Prior qtr. | 39 | 42 | 38 | 42 | 39 | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 58 | 64 | 53 | 54 | 51 |
| Prior qtr. | 49 | 61 | 54 | 52 | 47 | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 37 | 43 | 39 | 38 | 42 |
| Prior qtr. | 35 | 39 | 39 | 39 | 37 | |
| % All credit needs not satisfied | 11/2005 | 8 | 6 | 5 | 8 | 8 |
| Prior qtr. | 6 | 5 | 6 | 5 | 7 | |
| % No credit needs | 11/2005 | 52 | 47 | 53 | 51 | 46 |
| Prior qtr. | 53 | 52 | 47 | 52 | 50 | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 64 | 57 | 63 | 64 | 58 |
| Prior qtr. | 58 | 55 | 58 | 54 | 56 | |
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 21 | 16 | 21 | 18 | 22 |
| Prior qtr. | 13 | 17 | 18 | 14 | 18 | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 10 | 11 | 11 | 12 | 7 |
| Prior qtr. | 10 | 13 | 13 | 9 | 13 | |
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 9 | 9 | 9 | 8 | 10 |
| Prior qtr. | 8 | 11 | 9 | 9 | 8 | |
| % Taxes | 11/2005 | 14 | 13 | 9 | 9 | 12 |
| Prior qtr. | 13 | 13 | 9 | 13 | 11 | |
| % Employee quality/costs | 11/2005 | 8 | 13 | 13 | 11 | 11 |
| Prior qtr. | 10 | 13 | 12 | 10 | 13 | |
| % Insurance | 11/2005 | 9 | 11 | 16 | 14 | 12 |
| Prior qtr. | 19 | 12 | 20 | 17 | 12 | |
| % Big-business competition | 11/2005 | 13 | 14 | 16 | 16 | 14 |
| Prior qtr. | 11 | 15 | 13 | 14 | 17 | |
| % Inflation/Rising prices | 11/2005 | 22 | 15 | 14 | 17 | 16 |
| Prior qtr. | 13 | 12 | 13 | 12 | 15 | |
| % Credit availability/Interest rates | 11/2005 | 4 | 5 | 3 | 3 | 3 |
| Prior qtr. | 2 | 2 | 4 | 3 | 3 | |
| % Regulations/Red tape | 11/2005 | 7 | 7 | 9 | 7 | 7 |
| Prior qtr. | 8 | 9 | 6 | 8 | 6 | |
* Insufficient cases
| Tennessee Quarterly Spotlight | |
| Since hurricanes Katrina and Rita, have you taken any actions to prepare your business for any disaster that may hit your area? | |
| Yes | 19% |
| No | 79% |
| Don't know/Refused | 3% |
| Total | 100% |
| Does your business have an emergency plan for disasters that you have communicated to your employees? | |
| Yes | 44% |
| No | 52% |
| Don't know/Refused | 3% |
| 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.
