Release Date: 12/ 01/ 2005
CONTACT: Will Newton, (512) 476-9847, or Nancy St. Pierre, (214) 614-3008
AUSTIN, Texas -- Increased purchasing prices and high energy costs plague state small-business owners near the end of the year, according to the Texas Small-Business ConditionsSM report released today by the National Federation of Independent Business, the nation's largest small-business advocacy organization.
Despite price hikes they are paying, Texas small-business owners are confident about the business outlook for the coming months primarily due to strong sales prospects. The northeast region of the state was the only region that saw a spike of confidence in the state's business environment with an increase of 7 percentage points over last quarter.
Rising energy costs are among the most rapidly increasing costs for small businesses, with the costs of materials and insurance following respectively.
Purchase price increases over the past three months have caused the most dramatic shift in small-business conditions, with a net 60 percent of small-business owners across the state indicating they have experienced increases, up 9 percentage points from the third quarter survey. All four state regions saw a dramatic rise in the number of small businesses experiencing higher purchase prices, but the northeast and south saw the greatest change. A net 63 percent of small-business owners in the northeast region indicated they experienced price hikes, up from a 47 net percent surveyed three months ago. The southern region of the state also experienced a double-digit increase in the number of small-business owners reporting rising purchase prices.
"Texas small-business owners are resilient and find a way to make things work even in a climate of rising energy and materials costs, but we need to remember that small businesses in the southern section of the state are struggling right now as they try to recover from the damage of Hurricane Rita," said Will Newton, NFIB/Texas state director. "Increases in overhead that are difficult to curb, like energy and materials, can be tough to overcome, particularly if small businesses are faced with rebuilding."
Across the state, small businesses have increased their selling prices to help offset purchase price and energy hikes, with the hurricane-stricken southern region showing the highest number of small businesses instituting price increases.
* Insufficient cases
| Texas Quarterly Spotlight | |||||
| Texas | North- east |
South- east |
South | West | |
| Which of your total costs are rising most rapidly? | |||||
| Energy | 29% | 27% | 27% | 35% | 36% |
| Labor | 12% | 12% | 13% | 11% | 10% |
| Insurance | 23% | 24% | 22% | 23% | 22% |
| Materials | 25% | 26% | 26% | 21% | 25% |
| Some other | 4% | 6% | 3% | 3% | 3% |
| None rising rapidly | 3% | 2% | 3% | 4% | 1% |
| Don't know/Refused | 5% | 3% | 6% | 3% | 3% |
| Total | 100% | 100% | 100% | 100% | 100% |
| Which of your total costs are rising next most rapidly? | |||||
| Energy | 27% | 29% | 28% | 20% | 22% |
| Labor | 18% | 15% | 20% | 19% | 18% |
| Insurance | 21% | 20% | 21% | 25% | 23% |
| Materials | 22% | 20% | 21% | 24% | 24% |
| Some other | 5% | 7% | 3% | 3% | 5% |
| None rising rapidly | 4% | 4% | 3% | 5% | 5% |
| Don't know/Refused | 4% | 4% | 4% | 4% | 4% |
| Total | 100% | 100% | 100% | 100% | 100% |
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 text of the questions and the complete response set to the survey can be found at www.NFIB.com/research.
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.
