Release Date: 03/ 01/ 2005
CONTACT: Gordon Dixon, (804) 377-3661 or Jim Brown, (615) 874-5288
New NFIB Survey Indicates State Faring Well in Region Despite Some Concerns
VIRGINIA -- Virginia's overall business climate is supportive of small business, especially when compared to some of its neighboring states, according to the inaugural Virginia Small-Business ConditionsSM report.
The report's data, which is the first compilation of its type, was released today by the National Federation of Independent Business/Virginia. It provides an overview of small-business conditions within Virginia and compares them with neighboring states.
A net 35 percent (positive percent minus negative percent) of respondents to a recent survey indicated Virginia is supportive of small business. Comparatively, Maryland and Tennessee registered a net 31 percent in each state, while North Carolina reported a nearly identical net 36 percent. In Virginia, more than 50 percent said government officials, bankers, media outlets and community organizations are supportive or highly supportive of small business while 15 percent said those same entities are not supportive or not at all supportive.
"Virginia is a relatively business-friendly state," NFIB/Virginia State Director Gordon Dixon said. "However, this study also shows that small businesses remain concerned about several challenges, including access to affordable health insurance."
Dixon said 35 percent of respondents indicated employee health premiums are rising more rapidly than any other insurance cost. Rising workers' compensation premiums (12 percent), the No. 2 concern, lagged significantly.
A net 53 percent of the state's small employers indicated business conditions in their market area are good, which trailed Maryland (net 65 percent) but surpassed North Carolina (net 38 percent) and Tennessee (net 47 percent). A net 24 percent saw those conditions improving, which compared to a net 25 percent in Maryland, net 27 percent in North Carolina and net 21 percent in Tennessee. A net 71 percent characterized the outlook for business over the next three months as good, citing sales prospects (43 percent) and greater productivity (12 percent) as primary reasons for their view.
A net 31 percent indicated that profits were "good," and a net 46 percent of those same respondents characterized sales as "good." Overall, a net 42 percent of small employers reported that over the last three months their purchasing prices rose, while a net 14 percent reported they had increased selling prices.
For information about the Small-Business ConditionsSM project and other small-business research studies conducted by NFIB Research Foundation, visit www.NFIB.com/research.
| Virginia Small-Business ConditionsSM | ||||||
| This chart shows the results from Virginia and its comparative standing among selected states in the region. | ||||||
| Va. | Md. | N.C. | Tenn. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 35 | 31 | 36 | 31 | |
| Prior qtr. | - | - | - | - | ||
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 53 | 65 | 38 | 47 | |
| Prior qtr. | - | - | - | - | ||
| Net % "improving" | 2/2005 | 24 | 25 | 27 | 21 | |
| Prior qtr. | - | - | - | - | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 71 | 77 | 70 | 68 | |
| Prior qtr. | - | - | - | - | ||
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 43 | 47 | 57 | 46 | |
| Prior qtr. | - | - | - | - | ||
| % Lower costs | 2/2005 | 5 | 3 | 4 | 4 | |
| Prior qtr. | - | - | - | - | ||
| % Price increases | 2/2005 | 5 | 4 | 2 | 4 | |
| Prior qtr. | - | - | - | - | ||
| % Greater productivity | 2/2005 | 12 | 15 | 17 | 14 | |
| Prior qtr. | - | - | - | - | ||
| % Government policy | 2/2005 | 7 | 7 | 2 | 6 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 6 | 29 | 14 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Cost increases | 2/2005 | 19 | 0 | 21 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Pressure on selling prices | 2/2005 | 13 | 0 | 7 | 6 | |
| Prior qtr. | - | - | - | - | ||
| % Lower productivity | 2/2005 | 0 | 0 | 21 | 6 | |
| Prior qtr. | - | - | - | - | ||
| % Government policies | 2/2005 | 25 | 14 | 7 | 35 | |
| Prior qtr. | - | - | - | - | ||
| Va. | Md. | N.C. | Tenn. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 46 | 58 | 39 | 41 | |
| Prior qtr. | - | - | - | - | ||
| Profits | ||||||
| Net % profits "good" | 2/2005 | 31 | 46 | 24 | 27 | |
| Prior qtr. | - | - | - | - | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 27 | 23 | 20 | 16 | |
| Prior qtr. | - | - | - | - | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 14 | 16 | 16 | 15 | |
| Prior qtr. | - | - | - | - | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 61 | 54 | 57 | 58 | |
| Prior qtr. | - | - | - | - | ||
| % Benefits | 2/2005 | 25 | 30 | 24 | 24 | |
| Prior qtr. | - | - | - | - | ||
| Va. | Md. | N.C. | Tenn. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 42 | 49 | 41 | 41 | |
| Prior qtr. | - | - | - | - | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 36 | 44 | 47 | 40 | |
| Prior qtr. | - | - | - | - | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 41 | 44 | 48 | 31 | |
| Prior qtr. | - | - | - | - | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 52 | 57 | 58 | 56 | |
| Prior qtr. | - | - | - | - | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 43 | 40 | 40 | 36 | |
| Prior qtr. | - | - | - | - | ||
| % All credit needs not satisfied | 2/2005 | 5 | 5 | 6 | 5 | |
| Prior qtr. | - | - | - | - | ||
| % No credit needs | 2/2005 | 49 | 51 | 51 | 56 | |
| Prior qtr. | - | - | - | - | ||
| Va. | Md. | N.C. | Tenn. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 42 | 48 | 54 | 49 | |
| Prior qtr. | - | - | - | - | ||
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 14 | 21 | 17 | 17 | |
| Prior qtr. | - | - | - | - | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 13 | 15 | 17 | 10 | |
| Prior qtr. | - | - | - | - | ||
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 7 | 7 | 11 | 9 | |
| Prior qtr. | - | - | - | - | ||
| % Taxes | 2/2005 | 10 | 10 | 9 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Employee quality/costs | 2/2005 | 11 | 7 | 11 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Insurance | 2/2005 | 15 | 15 | 15 | 14 | |
| Prior qtr. | - | - | - | - | ||
| % Big-business competition | 2/2005 | 16 | 14 | 15 | 15 | |
| Prior qtr. | - | - | - | - | ||
| % Inflation/Rising prices | 2/2005 | 8 | 14 | 16 | 12 | |
| Prior qtr. | - | - | - | - | ||
| % Credit availability/Interest rates | 2/2005 | 6 | 4 | 4 | 4 | |
| Prior qtr. | - | - | - | - | ||
| % Regulations/Red tape | 2/2005 | 9 | 13 | 5 | 6 | |
| Prior qtr. | - | - | - | - | ||
| Virginia Quarterly Spotlight | |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 9% |
| Workers' compensation | 12% |
| Product or professional liability | 9% |
| Property and casualty | 9% |
| Employee health | 35% |
| Don't know/Refused | 27% |
| Total | 100% |
| Did those premium increases cause you to terminate or postpone planned business investments? | |
| Yes | 16% |
| No | 71% |
| Don't know/Refused | 13% |
| Total | 100% |
The Poll
NFIB’s Virginia Small-Business ConditionsSM is a telephone survey of a random sample of Virginia 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.
