Release Date: 03/ 01/ 2005
CONTACT: Nancy St. Pierre, (214) 614-3008 or Michelle Dimarob, (202) 554-4000.
Strong sales prospects reason for optimism but small employers want improvement in state’s business environment
The outlook for Texas’ small-business economy, the most important contributor to the state’s prosperity, is positive despite an overall business climate that small-business owners say could be better, according the inaugural Texas Small-Business ConditionsSM report, a groundbreaking survey. The new report’s data, which was released today by the National Federation of Independent Business (NFIB)/Texas, provides an overview of small-business conditions within Texas’ principal regions.
An overwhelming majority of small employers in the state’s four primary regions, a net 67 percent in each region, see economic growth ahead for the next quarter but temper that optimism hoping a productive and small-business friendly legislative session will spur continued economic development.
“This study brings good news to the state because as small business grows and succeeds, so does the entire state’s economy,” said Will Newton, NFIB/Texas state director. “But we must balance this news with the overall feeling from small-business owners that our state needs be more business friendly in order to continue economic growth. Right now, legislators are discussing the possibility of further taxing the business community to fund public schools. Our tenuous economic climate would be impacted by such action. It would be like the legislature taking their foot off the gas in the hopes of going faster by taxing jobs which are the ‘gas’ for the Texas economy.”
According to the NFIB/Texas Small-Business ConditionsSM report, which will be released quarterly, an average of 37 percent of small employers say government policies make them pessimistic about the state’s business outlook.
Visit www.NFIB.com/TX for information about NFIB’s activities in Texas. 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. Future surveys will be released on June 1, Sept. 1 and Dec. 1. On those dates, the survey will be compared to the previous quarter, as well as to neighboring states.
| Texas Small-Business ConditionsSM | ||||||
| This chart shows the results within Texas and its principal regions. | ||||||
| Texas | North- east |
South- east |
South | West | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 33 | 33 | 29 | 40 | 38 |
| Prior qtr. | - | - | - | - | - | |
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 44 | 42 | 45 | 45 | 49 |
| Prior qtr. | - | - | - | - | - | |
| Net % "improving" | 2/2005 | 27 | 29 | 24 | 31 | 21 |
| Prior qtr. | - | - | - | - | - | |
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 67 | 67 | 67 | 67 | 67 |
| Prior qtr. | - | - | - | - | - | |
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 41 | 39 | 44 | 40 | 40 |
| Prior qtr. | - | - | - | - | - | |
| % Lower costs | 2/2005 | 3 | 2 | 2 | 5 | 4 |
| Prior qtr. | - | - | - | - | - | |
| % Price increases | 2/2005 | 4 | 3 | 4 | 4 | 7 |
| Prior qtr. | - | - | - | - | - | |
| % Greater productivity | 2/2005 | 16 | 15 | 18 | 15 | 16 |
| Prior qtr. | - | - | - | - | - | |
| % Government policy | 2/2005 | 6 | 6 | 6 | 7 | 4 |
| Prior qtr. | - | - | - | - | - | |
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 13 | 15 | 14 | 9 | 13 |
| Prior qtr. | - | - | - | - | - | |
| % Cost increases | 2/2005 | 7 | 8 | 7 | 9 | 0 |
| Prior qtr. | - | - | - | - | - | |
| % Pressure on selling prices | 2/2005 | 5 | 8 | 0 | 9 | 6 |
| Prior qtr. | - | - | - | - | - | |
| % Lower productivity | 2/2005 | 8 | 0 | 21 | 0 | 6 |
| Prior qtr. | - | - | - | - | - | |
| % Government policies | 2/2005 | 37 | 31 | 36 | 52 | 31 |
| Prior qtr. | - | - | - | - | - | |
| Texas | North- east |
South- east |
South | West | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 40 | 34 | 41 | 45 | 47 |
| Prior qtr. | - | - | - | - | - | |
| Profits | ||||||
| Net % profits "good" | 2/2005 | 28 | 25 | 27 | 32 | 33 |
| Prior qtr. | - | - | - | - | - | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 18 | 15 | 20 | 19 | 19 |
| Prior qtr. | - | - | - | - | - | |
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 11 | 7 | 13 | 14 | 15 |
| Prior qtr. | - | - | - | - | - | |
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 60 | 59 | 60 | 59 | 66 |
| Prior qtr. | - | - | - | - | - | |
| % Benefits | 2/2005 | 23 | 24 | 23 | 24 | 19 |
| Prior qtr. | - | - | - | - | - | |
| Texas | North- east |
South- east |
South | West | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 45 | 43 | 49 | 42 | 38 |
| Prior qtr. | - | - | - | - | - | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 39 | 39 | 37 | 44 | 40 |
| Prior qtr. | - | - | - | - | - | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 38 | 36 | 39 | 39 | 42 |
| Prior qtr. | - | - | - | - | - | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 57 | 57 | 59 | 55 | 49 |
| Prior qtr. | - | - | - | - | - | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 41 | 42 | 38 | 41 | 43 |
| Prior qtr. | - | - | - | - | - | |
| % All credit needs not satisfied | 2/2005 | 6 | 5 | 7 | 7 | 4 |
| Prior qtr. | - | - | - | - | - | |
| % No credit needs | 2/2005 | 47 | 45 | 50 | 47 | 47 |
| Prior qtr. | - | - | - | - | - | |
| Texas | North- east |
South- east |
South | West | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 46 | 43 | 47 | 52 | 52 |
| Prior qtr. | - | - | - | - | - | |
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 15 | 12 | 16 | 15 | 16 |
| Prior qtr. | - | - | - | - | - | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 11 | 11 | 9 | 14 | 11 |
| Prior qtr. | - | - | - | - | - | |
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 10 | 11 | 11 | 7 | 7 |
| Prior qtr. | - | - | - | - | - | |
| % Taxes | 2/2005 | 11 | 10 | 11 | 11 | 14 |
| Prior qtr. | - | - | - | - | - | |
| % Employee quality/costs | 2/2005 | 8 | 7 | 7 | 7 | 11 |
| Prior qtr. | - | - | - | - | - | |
| % Insurance | 2/2005 | 16 | 16 | 19 | 10 | 13 |
| Prior qtr. | - | - | - | - | - | |
| % Big-business competition | 2/2005 | 17 | 17 | 17 | 19 | 14 |
| Prior qtr. | - | - | - | - | - | |
| % Inflation/Rising prices | 2/2005 | 11 | 13 | 9 | 13 | 11 |
| Prior qtr. | - | - | - | - | - | |
| % Credit availability/Interest rates | 2/2005 | 3 | 3 | 3 | 5 | 3 |
| Prior qtr. | - | - | - | - | - | |
| % Regulations/Red tape | 2/2005 | 8 | 8 | 8 | 9 | 9 |
| Prior qtr. | - | - | - | - | - | |
The Poll
NFIB’s Texas Small-Business ConditionsSM is a telephone survey of a random sample of Texas’ small employers regarding business condition within the state. “Small employer” is defined here as someone employing between one and 250 people (not including the owner(s)) in a for-profit business. Four separate regional surveys are conducted, each with a minimum of 350 respondents. The Northeast Texas survey samples small employers in ZIP codes 75000-75799, 76000-76499 and 76600-76799. Wichita Falls, Waco and Longview are included in a region centering on the Dallas-Ft. Worth area. The Southeast Texas survey samples small employers in ZIP codes 75800-75999, 76500-76599, 77000-77899, 78600-78799 and 78900-78999. Nacogdoches, Beaumont, Bryan, Killeen and Austin are included in a region centering on the Houston area. The South Texas survey samples small employers in ZIP codes 77900-78599 and 78800-78899. Victoria, Brownsville and Del Rio are included in a region centering on San Antonio. Finally, the West Texas survey samples small employers in zip codes 79000-79999 and 76800-76999. Amarillo, Abilene, San Angelo and El Paso are included. The sampling error of each survey is ± 5 percentage points. States totals result by population weighting regional totals. 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.
