Release Date: 06/ 01/ 2005
CONTACT: Carolyn Logue, (360) 786-8675 or Tony Malandra, (415) 664-9685
Quality of life and roots still have strong hold on Main Street, but they are unwilling to take business risks
For the second consecutive quarter, Washington has held on to its lead as having the worst small-business environment in the nation, according to a report released today by the Research Foundation of America's largest small-business advocacy organization, NFIB.
In compiling its Washington Small-Business ConditionsSM report, NFIB asks small-business owners to assess how supportive the state's business environment – which includes government, banks, the media and community groups – is of them. Washington tallied a negative 4 percent in the net-supportive category, only a slight improvement – if it can be called that – over the last quarter's negative 9 percent. The result was the worst in the nation. Neighboring Oregon posted a positive 20 percent net-supportive rating and similar-sized Colorado scored a positive 32 percent.
"I encourage everyone to read the report before jumping to any conclusions," said Carolyn Logue, state director for the 15,000-member, Washington state arm of NFIB. "Although we've had some slippage in most categories, we rank 10th in the nation in sales, 10th in prospects, 13th in profits and the outlook for business in the next three months posted modest gains. When we asked what they valued most in the areas where they have set up shop, 39 percent of respondents said quality of life, 26 percent said their roots were there, but opportunity registered only 13 percent and vibrancy and vitality only 3 percent."
Additionally the report revealed a 17-point drop – from 62 percent to 45 percent – on the question of whether or not small businesses could increase sales another 10 percent without any new inputs, an indication that small-business owners are optimistic in regards to sales but are unwilling to take on the risk of additional investments. This finding was reinforced by the 5-point drop in current job openings. "One safe conclusion to draw from this report is that small-business owners want to live in this state and are ready to grow leaps and bounds if only we had a more supportive state government," said Logue.
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.
| Washington Small-Business ConditionsSM | ||||||
| This chart shows the results from Washington and its comparative standing among selected states in the region. | ||||||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 5/2005 | -4 | 0 | 32 | 20 | |
| Prior qtr. | -9 | 17 | 35 | 29 | ||
| Business conditions in market area | ||||||
| Net % "good" | 5/2005 | 33 | 26 | 39 | 30 | |
| Prior qtr. | 36 | 41 | 41 | 39 | ||
| Net % "improving" | 5/2005 | 11 | 15 | 23 | 20 | |
| Prior qtr. | 26 | 24 | 27 | 23 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 5/2005 | 63 | 57 | 61 | 64 | |
| Prior qtr. | 67 | 66 | 68 | 66 | ||
| Reason for optimism | ||||||
| % Sales prospects | 5/2005 | 42 | 42 | 39 | 36 | |
| Prior qtr. | 51 | 43 | 43 | 37 | ||
| % Lower costs | 5/2005 | 1 | 2 | 3 | 1 | |
| Prior qtr. | 1 | 2 | 3 | 4 | ||
| % Price increases | 5/2005 | 4 | 6 | 3 | 4 | |
| Prior qtr. | 4 | 5 | 5 | 6 | ||
| % Greater productivity | 5/2005 | 13 | 15 | 18 | 16 | |
| Prior qtr. | 16 | 13 | 14 | 14 | ||
| % Government policy | 5/2005 | 3 | 4 | 3 | 4 | |
| Prior qtr. | 2 | 4 | 4 | 2 | ||
| % Seasonal/Weather | 5/2005 | 10 | 13 | 15 | 17 | |
| Prior qtr. | - | - | - | - | ||
| Reason for pessimism | ||||||
| % Sales prospects | 5/2005 | IC* | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Cost increases | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Pressure on selling prices | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Lower productivity | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Government policies | 5/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 5/2005 | 44 | 31 | 39 | 45 | |
| Prior qtr. | 43 | 36 | 38 | 48 | ||
| Profits | ||||||
| Net % profits "good" | 5/2005 | 24 | 18 | 21 | 21 | |
| Prior qtr. | 23 | 23 | 29 | 28 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 5/2005 | 15 | 19 | 20 | 18 | |
| Prior qtr. | 20 | 22 | 16 | 15 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 5/2005 | 23 | 13 | 14 | 20 | |
| Prior qtr. | 28 | 12 | 13 | 16 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 5/2005 | 48 | 49 | 53 | 56 | |
| Prior qtr. | 55 | 52 | 57 | 55 | ||
| % Benefits | 5/2005 | 29 | 26 | 27 | 20 | |
| Prior qtr. | 25 | 32 | 27 | 24 | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 5/2005 | 44 | 43 | 47 | 43 | |
| Prior qtr. | 48 | 41 | 45 | 43 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 39 | 38 | 43 | 41 | |
| Prior qtr. | 46 | 39 | 44 | 48 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 5/2005 | 40 | 39 | 45 | 40 | |
| Prior qtr. | 43 | 39 | 40 | 42 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 5/2005 | 45 | 50 | 53 | 57 | |
| Prior qtr. | 62 | 57 | 58 | 54 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 5/2005 | 42 | 39 | 39 | 36 | |
| Prior qtr. | 36 | 38 | 39 | 39 | ||
| % All credit needs not satisfied | 5/2005 | 5 | 6 | 6 | 6 | |
| Prior qtr. | 10 | 7 | 4 | 3 | ||
| % No credit needs | 5/2005 | 47 | 47 | 49 | 51 | |
| Prior qtr. | 52 | 50 | 52 | 51 | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 5/2005 | 59 | 46 | 34 | 62 | |
| Prior qtr. | 54 | 45 | 50 | 54 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 5/2005 | 19 | 19 | 15 | 23 | |
| Prior qtr. | 22 | 18 | 15 | 22 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 5/2005 | 9 | 12 | 12 | 8 | |
| Prior qtr. | 16 | 13 | 8 | 9 | ||
| Single most important business problem | ||||||
| % Weak sales | 5/2005 | 6 | 13 | 12 | 10 | |
| Prior qtr. | 10 | 10 | 12 | 10 | ||
| % Taxes | 5/2005 | 21 | 11 | 10 | 9 | |
| Prior qtr. | 19 | 11 | 12 | 8 | ||
| % Employee quality/costs | 5/2005 | 8 | 7 | 9 | 9 | |
| Prior qtr. | 11 | 9 | 8 | 11 | ||
| % Insurance | 5/2005 | 14 | 15 | 15 | 17 | |
| Prior qtr. | 14 | 19 | 19 | 15 | ||
| % Big-business competition | 5/2005 | 14 | 15 | 17 | 10 | |
| Prior qtr. | 12 | 13 | 12 | 18 | ||
| % Inflation/Rising prices | 5/2005 | 10 | 9 | 14 | 17 | |
| Prior qtr. | 10 | 7 | 9 | 9 | ||
| % Credit availability/Interest rates | 5/2005 | 2 | 2 | 3 | 2 | |
| Prior qtr. | 4 | 5 | 6 | 3 | ||
| % Regulations/Red tape | 5/2005 | 10 | 10 | 4 | 9 | |
| Prior qtr. | 11 | 11 | 10 | 13 | ||
| Washington Quarterly Spotlight | |
| What do you value the most in the area where you do business? | |
| Quality of life | 39% |
| Physical environment | 10% |
| Opportunity | 13% |
| Vibrance and vitality | 3% |
| My roots are here | 26% |
| Other | 2% |
| Don't know/Refused | 7% |
| Total | 100% |
| Which type of tax increase would have the most adverse effect on your business? | |
| Payroll taxes | 27% |
| Corporate income or franchise taxes | 10% |
| Real property taxes | 9% |
| Sales taxes | 12% |
| Personal income taxes | 7% |
| Personal property, including inventory | 11% |
| All/Any | 1% |
| Other | 4% |
| Don't know/Refused | 17% |
| Total | 100% |
The Poll
NFIB’s Washington Small-Business ConditionsSM is a telephone survey of a random sample of Washington 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.
