Best Of Show Business Activity: Trouble In The Oil Patch

 

1. New Hampshire 6. Florida

2. Colorado 7. Georgia

3. Alaska 8. California

4. New Jersey 9. Massachusetts

5. Connecticut 10. New York

Numbers don't often reflect the sort of drama to be found in this year's indicators of business activity. Of last year's 10 most active states, 4 have fallen from grace, with 1 dropping a full 19 rungs on the ladder. All 4 are Sunbelt states: Texas, Oklahoma, Arizona, and New Mexico. As measured by two of the most significant indexes, personal income and employment, their growth has slowed significantly. In Oklahoma, for example, personal income and employment declined 13 and 12 percentage points, respectively, while population grew. Texas's slowdown was even more dramatic -- employment down almost 15 points from last year, income down almost 13.

The cause is not hard to find: the glut of oil and gas. The Northeast states that replaced last year's most active states at the head of the pack -- Connecticut, Massachusetts, New Hampshire, and New York -- clearly did not gain the business activity that the Southwest lost. Populations in the New England states, for instance, grew at an even more lackluster rate than last year. And although Connecticut and New Hampshire posted improvements in employment -- about 2 points each -- Massachusetts lost a point. All of these states showed declines in the income category of about 3 percentage points.

The INC. study weights two factors -- capital resources and state support of small business -- more heavily than it does the indexes of business activity. States, after all, have more control over such matters. In the overall rankings, therefore, the Southwest did not suffer drastically. Furthermore, 1 of the dropouts from last year's top 10 in business activity -- Texas -- continues to be very fertile soil for companies on INC.'s list of the 100 fastest-growing public companies in America.

STATE SUPPORT: INDIANA WANTS YOU

1. Indiana 6. Michigan

2. Connecticut 7. Ohio

3. Pennsylvania 8. Louisiana

4. Massachusetts 9. Illinois

5. New York 10. Minnesota

A state's eagerness to help small companies can't make up for a basic lack of capital. Increasingly, however, states are choosing to exercise whatever influence they can muster to create better environments for smaller companies.

As in past years, INC. surveyed the 50 states to determine the levels of official small business support. We measured "support" in terms of whether or not states had small business assistance offices, ombudsmen, governor's advisory councils, legislative committees, statewide conferences, and procurement set-asides for small businesses.

Two years ago, only 29 states had advisory councils on small business; this year, 42 states have them. Similarly, the number of legislative committees on small business has jumped from 26 in 1982 to 33 this year.

The states that made this year's top 10 not only offered all six programs, but also demonstrated energetic efforts to expand existing programs and add new ones. Seven of last year's top 10 -- Pennsylvania, Michigan, New York, Illinois, Indiana, Massachusetts, and Ohio -- maintained the types of initiatives that put them on the list last year. Indiana's advancement from #6 last year to #1 reflects its ongoing efforts to upgrade both its ombudsman's office and the governor's advisory council. Connecticut's placement in the #2 spot is a result of having set up a new advisory council and two legislative committees on small business. Massachusetts, Illinois, and Pennsylvania each expanded or revamped existing programs to better serve the needs of the small business sector. Of all the 50 states, only Wyoming continued to report that it had none of the programs INC. was looking for.

LABOR: PAYING YOUR DUES

1 Wyoming 6. Hawaii

2. South Dakota 7. Idaho

3. Kansas 8. Nebraska

4. Vermont 9. Utah

5. Colorado 10. North Dakota

The labor market is a rental market. Not since the abolition of slavery has anyone sold his or her labor. The INC. survey thus presents the labor environments of the 50 states as though they were so many houses up for rent. As always, the question is, What do you get for what you pay?

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