HOUSTON, Nov. 3 /PRNewswire-FirstCall/ -- Owners of small and medium-sized companies are optimistic about the business outlook for 2006 and are predicting growth for their companies in the coming year, according to results of the Administaff (NYSE: ASF) Business Confidence Survey released today. Half of the survey respondents intend to invest more in their businesses in 2006 compared to the prior year, and most plan to increase both salaries and hiring. More than two-thirds -- 68 percent -- of respondents said they expect to experience more growth in the coming year than in 2005. This compares to 78 percent of respondents in a January 2005 survey, who said they were expecting higher year-over-year growth going into 2005. While most business owners say their outlook is bright for 2006, they are also keeping a watchful eye on the economy. More than half -- 54 percent -- reported they are "optimistic" about the economy in the coming year, while about a third said they are undecided. Also today, Administaff released compensation data compiled from its client base of more than 4,900 small and medium-sized businesses throughout the country. A comparison of third-quarter data against the same period in 2004 shows that average compensation is up 5.8 percent and average commissions have increased 7.2 percent. In addition, overtime pay is running 10.1 percent of regular pay. "Based on employment data we're seeing through the third quarter, plus the outlook that business owners are expressing for 2006, business sentiment seems to range from mostly strong to cautiously optimistic," said Paul J. Sarvadi, chairman and chief executive officer of Administaff. Other highlights of the survey include: * 64 percent plan to increase salaries and wages, less than 2 percent expect salaries to fall, and the remainder said they would hold compensation at 2005 levels * 66 percent intend to add employees * 73 percent said overtime is likely to remain the same * 50 percent project an increase in capital spending While most business owners said they plan to add staff, they also are focusing efforts on keeping existing employees. More than two-thirds -- 77 percent -- said they plan to take steps to boost employee retention. Key Business Issues Cost and availability of health care remains a concern for small business owners. Respondents to the survey overwhelmingly said that making health care more accessible and affordable is the most important issue they are grappling with. Other challenges, listed in ranking order, are: * Curb rising energy costs * Reduce taxes * Ease the regulatory paperwork burden * Simplify the tax code * Eliminate frivolous lawsuits Some respondents said they are watching to see how economic and political factors, such as the rising price of fuel and the war on terror, may affect their businesses. "We are optimistic in a guarded way," one business owner wrote. "We are concerned that although we support the country's efforts against terror, something may happen to hurt consumer confidence, or higher interest rates and/or energy costs could stagnate the economy." For others, the outlook is more positive. "We are anticipating some aggressive growth in 2006," said one of the respondents. Another reported, "2006 will be a good year for us." About the Business Confidence Survey The Administaff Business Confidence Survey was conducted in late October. Researchers surveyed a random sample of chief executive officers, chief financial officers and other executives in a variety of industries at Administaff client companies across the United States. The overall sampling error is +/- 5 percent at the 90 percent confidence level. Houston-based Administaff (NYSE: ASF) is the nation's leading professional employer organization, serving as a full-service human resources department for thousands of small and medium-sized businesses throughout the United States. The company's Personnel Management System(SM) provides a comprehensive human resources solution that includes employer liability management, government compliance, benefits management, employment administration, recruiting and selection, performance management, training and development, and business services. For additional information, visit http://www.administaff.com . The statements contained herein that are not historical facts are forward- looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "objective," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Administaff, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our current expectations, estimates and projections. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) changes in general economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations; (iii) changes in our direct costs and operating expenses including, but not limited to, increases in health insurance premiums and workers' compensation rates and underlying claims trends, financial solvency of workers' compensation carriers and other insurers, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims, changes in the costs of expanding into new markets, and failure to manage growth of our operations; (iv) our ability to effectively manage our retirement services operation; (v) the effectiveness of our sales and marketing efforts; (vi) changes in the competitive environment in the PEO industry, including the entrance of new competitors and our ability to renew or replace client companies; (vii) our liability for worksite employee payroll and benefits costs; and (viii) an adverse final judgment or settlement of claims against Administaff. These factors are discussed in detail in our 2004 annual report on Form 10-K and elsewhere in this report. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.
SOURCE Administaff, Inc.