Release Date: 12/ 01/ 2005
CONTACT: Carolyn Logue, (360) 786-8675 or Tony Malandra, (415) 664-9685
Dim view of Washington small-business environment belies strong performance in some important categories
OLYMPIA, Wash. -- Washington is no longer the worst among the 26 largest-economy states in the nation on how its small-business owners view the support they get from their state, communities, and institutions, according to the latest Small-Conditions ReportSM from the National Federation of Independent Business released today.
The Research Foundation of NFIB, America's largest small-business advocacy group, begins each of its 26 state reports with the same question: Do you consider the state business environment, including government officials, bankers, media outlets, community organizations, etc., to be highly supportive, supportive, neutral, not supportive or not at all supportive of small business? A net-support rate ("highly" and "supportive" minus "not supportive" and "not at all supportive") is then calculated to come up with a general perception. For three consecutive quarters, Washington has been the only state to rack up a negative rating each time: a net negative 9 percent in March, a net negative 4 percent in June, and a net negative 1 percent in September. But the negative streak is over in today's report with a 0 percent net-support rate. By comparison, Iowa small-business owners gave their state a net positive 37 percent, the best in the nation. New York had the worst with negative 1 percent.
"Looking at just that one question can leave one with the false impression that small business is about as welcome as a toxic waste dump in Washington," said Carolyn Logue, state director for the 15,000-member NFIB/Washington "But a closer look at the report reveals a disconnection between how small-business owners view the support they receive from other societal entities and how they are actually doing. On the one hand, you have a depressing picture and on the other, very obvious hope, such as Washington racking up the sixth-best rating in sales and the seventh-best in profits."
The disconnection, however, is not on the part of small-business owners, according to Logue, but on the part of elected and appointed government officials who are all behind small business in rhetoric, but in reality tax them on their gross sales whether or not any profit was made. Lawmakers also raise the minimum-wage rates on them every year (one of a few states to do so), make it a regular ritual to add more costly mandates to their health care, and ask for more workers' compensation premiums -- in spite of a $1 billion surplus in the trust fund. "We should be doing much better on the first question. Moving from negative 9 percent to zero percent only means our state's elected officials have a lot more work to do to show small businesses they really care," Logue said.
Two new questions added to the December survey showed the recent run-up in energy prices having a "seriously negative," "somewhat negative," or "slightly negative" effect on nearly 74 percent of small-business owners. As to which costs were rising most rapidly, 27 percent of small-business owners said materials; 27 percent chose insurance; and 21 percent said energy.
| 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 | 11/2005 | 0 | 7 | 33 | 14 | |
| Prior qtr. | -1 | 9 | 28 | 13 | ||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 38 | 44 | 42 | 41 | |
| Prior qtr. | 42 | 44 | 44 | 41 | ||
| Net % "improving" | 11/2005 | 12 | 11 | 10 | 15 | |
| Prior qtr. | 19 | 16 | 20 | 12 | ||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 54 | 58 | 59 | 62 | |
| Prior qtr. | 67 | 66 | 64 | 64 | ||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 49 | 41 | 43 | 46 | |
| Prior qtr. | 44 | 42 | 44 | 44 | ||
| % Lower costs | 11/2005 | 4 | 4 | 4 | 3 | |
| Prior qtr. | 2 | 4 | 1 | 2 | ||
| % Price increases | 11/2005 | 2 | 5 | 4 | 3 | |
| Prior qtr. | 4 | 3 | 3 | 3 | ||
| % Greater productivity | 11/2005 | 12 | 14 | 17 | 12 | |
| Prior qtr. | 17 | 15 | 10 | 11 | ||
| % Government policy | 11/2005 | 4 | 4 | 5 | 2 | |
| Prior qtr. | 4 | 5 | 4 | 4 | ||
| % Seasonal/Weather | 11/2005 | 11 | 14 | 10 | 15 | |
| Prior qtr. | 8 | 7 | 11 | 12 | ||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Cost increases | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Lower productivity | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| % Government policies | 11/2005 | IC | IC | IC | IC | |
| Prior qtr. | IC | IC | IC | IC | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 45 | 44 | 45 | 51 | |
| Prior qtr. | 52 | 47 | 52 | 52 | ||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 31 | 32 | 24 | 35 | |
| Prior qtr. | 32 | 31 | 33 | 34 | ||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 16 | 17 | 19 | 19 | |
| Prior qtr. | 21 | 23 | 19 | 17 | ||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 22 | 14 | 17 | 21 | |
| Prior qtr. | 20 | 13 | 12 | 25 | ||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 50 | 51 | 56 | 56 | |
| Prior qtr. | 53 | 52 | 56 | 53 | ||
| % Benefits | 11/2005 | 31 | 25 | 26 | 24 | |
| Prior qtr. | 29 | 25 | 22 | 28 | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 45 | 42 | 50 | 47 | |
| Prior qtr. | 42 | 46 | 42 | 45 | ||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 44 | 40 | 48 | 50 | |
| Prior qtr. | 46 | 44 | 39 | 43 | ||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 43 | 36 | 46 | 47 | |
| Prior qtr. | 44 | 38 | 41 | 41 | ||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 51 | 53 | 53 | 63 | |
| Prior qtr. | 53 | 54 | 52 | 54 | ||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 35 | 34 | 39 | 35 | |
| Prior qtr. | 36 | 36 | 37 | 39 | ||
| % All credit needs not satisfied | 11/2005 | 7 | 6 | 3 | 4 | |
| Prior qtr. | 5 | 8 | 5 | 7 | ||
| % No credit needs | 11/2005 | 55 | 51 | 55 | 55 | |
| Prior qtr. | 52 | 50 | 49 | 48 | ||
| Wash. | No. Calif. |
Colo. | Ore. | |||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 62 | 52 | 59 | 64 | |
| Prior qtr. | 52 | 48 | 50 | 55 | ||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 23 | 24 | 21 | 27 | |
| Prior qtr. | 19 | 20 | 17 | 20 | ||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 12 | 11 | 14 | 11 | |
| Prior qtr. | 11 | 10 | 10 | 13 | ||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 12 | 9 | 8 | 11 | |
| Prior qtr. | 9 | 11 | 7 | 10 | ||
| % Taxes | 11/2005 | 14 | 10 | 10 | 9 | |
| Prior qtr. | 16 | 10 | 11 | 9 | ||
| % Employee quality/costs | 11/2005 | 12 | 12 | 9 | 14 | |
| Prior qtr. | 10 | 12 | 11 | 10 | ||
| % Insurance | 11/2005 | 10 | 15 | 14 | 15 | |
| Prior qtr. | 12 | 19 | 16 | 17 | ||
| % Big-business competition | 11/2005 | 9 | 13 | 13 | 9 | |
| Prior qtr. | 12 | 13 | 16 | 14 | ||
| % Inflation/Rising prices | 11/2005 | 15 | 10 | 19 | 17 | |
| Prior qtr. | 12 | 15 | 13 | 11 | ||
| % Credit availability/Interest rates | 11/2005 | 2 | 2 | 5 | 3 | |
| Prior qtr. | 1 | 3 | 3 | 3 | ||
| % Regulations/Red tape | 11/2005 | 12 | 9 | 6 | 8 | |
| Prior qtr. | 11 | 6 | 5 | 9 | ||
| Washington Quarterly Spotlight | |
| What of your total costs are rising most rapidly? | |
| Energy | 21% |
| Labor | 12% |
| Insurance | 27% |
| Materials | 27% |
| Some other | 4% |
| None rising rapidly | 5% |
| Don't know/Refused | 4% |
| Total | 100% |
| What has been the impact on your business of the recent run-up in energy prices? | |
| Seriously negative | 17% |
| Somewhat negative | 29% |
| Slightly negative | 28% |
| No impact | 21% |
| Positive | 2% |
| Don't know/Refused | 4% |
| 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.
