Two-Thirds Express Concerns About Potential Closures Amid a Second Wave
Growing Number Believe It Will Take Six Months or More for Economy to Recover
WASHINGTON, D.C. — Most small businesses are open in some capacity and are increasingly optimistic about the future, even while facing continued challenges from the coronavirus pandemic, according to the latest poll taken May 21 – 27, 2020 and released today by the U.S. Chamber of Commerce and MetLife.
Nearly eight in ten small businesses (79%) are either fully (41%) or partially (38%) open. Small business owners in the South are significantly more likely than other regions to report they are fully open (51% compared to 31-39% in other regions).
Of the approximately one in five small businesses who reported a temporary closure at some point since the start of the COVID-19 pandemic (23%), 43% have reopened. Those who are still temporarily closed are split on if they will open in the next two weeks (49% say it is likely, 47% say unlikely).
“Businesses across the country are beginning to reopen but see a long road ahead. There is still a need for Congress to pass targeted, temporary, and timely assistance for small businesses,” said Tom Sullivan, vice president of small business policy, U.S. Chamber of Commerce.
Still, more small businesses are anticipating a longer window before things return to normal. More than half (55%) of small businesses believe it will take six months to a year before the U.S. business climate returns to normal, up from 50% last month and 46% two months ago. Six percent say it never will return to normal. Meanwhile, two-thirds (66%) are concerned about having to close again, or stay closed, if there is a second wave of the coronavirus. More are anxious about this in the West (77%) and Northeast (74%) than in the Midwest (62%) and South (55%).
A slight majority of small business that have shed workers anticipate rehiring most employees within the next six months. More small businesses report having fewer employees (22%) than more (6%), but the majority (71%) say they have the same number of employees as in February of this year before the COVID-19 pandemic began in the United States. Among those that report having fewer employees now, more than half (55%) anticipate rehiring or bringing back most at some point in the next six months.
Small Business Future Expectations
Overall, business health assessments and economic outlooks remain mostly steady from the previous month. Fifty-three percent of owners believe their business is in good health, compared to 50% last month. One in four (24%) rate the U.S. economy as ‘good,’ compared to 22% last month. Slightly more believe their local economy is in good health this month (28%), similar to last month’s 25%. However, the number of small businesses saying the U.S. economy is in ‘very poor’ health shrunk to 18%, from 29% last month. This reflects a return to similar sentiments in late March (when 18% considered the economy ‘very poor’).
Expectations around cash flow and future revenue are slightly better. Currently, 56% feel comfortable with their company’s cash flow situation, up from last month’s low point of 48%, and in line with late March (59%). There is also a drop in those expecting decreasing revenue over the coming year.
Half of small business owners (50%) expect next year’s revenues to increase, while 19% expect them to decrease. Last month, 47% predicted an increase in revenues and 25% anticipated a sales decrease over the next year – identical to views at the end of first quarter 2020.
While small businesses remain concerned about the economic and financial toll of the pandemic, the intensity of that concern has decreased. More than eight in ten are concerned about the impact of COVID-19 on their business (82%), similar to the last two months the poll was in field (85% in April and 84% in March). However, the number of small business owners (43%) that say they are “very concerned” about the impact of COVID-19 on their business has slightly subsided, down 10 percentage points from a month ago, and a 15-point drop from two months ago.
“While we know small businesses are still facing real challenges,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “It is encouraging that some optimism has been seen, including improved comfort with cash flow and expectations for future revenue. As more small businesses begin to re-open, we hope this trend continues.”
Reopening Adaptations and Concerns
More than eight in ten small businesses that have not permanently closed (83%) report that they are making or planning to make adaptations in response to the coronavirus. Of the businesses making adaptations, nearly half (48%) have either started or plan to start more frequent cleaning/disinfecting of surfaces, while 44% are asking (or plan to ask) employees to self-monitor for symptoms and stay home if they are feeling sick.
Four in ten small businesses are also making or plan to make adaptations around wearing protective gear (40%) or requiring six feet of distance (39%) for employees and customers. As businesses begin to make these adaptations, it is worth noting that more than six in ten (62%) are concerned about the risks the virus poses to their employees and customers.
“Small business owners are cautiously optimistic about opening their doors again. But they remain concerned on what the post-COVID world looks like and how they can successfully reopen, while ensuring the safety for their employees and customers,” said Suzanne Clark, president, U.S. Chamber of Commerce. “Business owners across America need clear guidance at the federal, state, and local level on how to reopen their businesses safely and sustainably.”
Asked to look at the next few months, the primary concerns cited by small business owners are: financial hardships due to prolonged closures (71%), low business demand (67%), and closures related to a second wave (66%). Two-thirds (67%) of small businesses with 20-500 employees and a majority (51%) of mid-size small businesses (5-19 employees) are worried about the possibility of lawsuits related to the coronavirus.
As small businesses adapt to the new environment, three in ten (30%) anticipate needing more guidelines on how to keep customers and employees safe and well. Fewer anticipate a need for more loans and financial assistance (26%, down from 35% last month) over the next few months.
NOTE: The latest Small Business Coronavirus Impact Poll was in the field May 21 – 27, 2020, prior to the civil unrest now gripping cities across our country.
The Small Business Coronavirus Impact Poll is a special monthly coronavirus report, separate from the quarterly MetLife & U.S. Chamber of Commerce Small Business Index. To read the full report, visit uschamber.com/sbpoll.
For small business resources on the coronavirus, please visit uschamber.com/co. The latest resources, step-by-step guidance, and insights to help American businesses, workers, and families is available at uschamber.com/coronavirus.