Attitudes of small businesses in Northeast are pessimistic about the economy
WASHINGTON, D.C. — Small businesses anticipate the worst of the pandemic is still ahead and half (50%) of small businesses see their operations continuing for a year or less in the current business climate before having to permanently close according to a new poll taken October 30 – November 10 and released today by the U.S. Chamber of Commerce and MetLife. The survey also found that small businesses in the Northeast are particularly pessimistic about their own business health and the economy.
Amid a new surge in cases across the nation, most (62%) small businesses fear that the worst is still to come with COVID-19’s economic impact and three-quarters (74%) of all small business owners say they need further government assistance to weather the storm. That percentage increases to 81% when looking at minority-owned businesses. Only four in 10 (40%) of all small business owners believe their business can continue to operate indefinitely without having to shut down permanently.
“The impact of coronavirus continues to take a devastating toll on America’s small businesses. In fact, half of them say they can operate for a year or less before closing permanently,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. “We must ensure small businesses across the country receive the assistance they need from the federal government. Not passing the bipartisan compromise for temporary and targeted relief risks the permanent loss of tens of thousands of small businesses, financial hardship for millions of Americans, and unnecessary delays in combatting the pandemic.”
Other regional findings include:
- Attitudes in the Northeast are the most pessimistic of all regions this quarter. Northeastern small businesses report drastically lower numbers in overall business health (38%, down 13 points from last quarter) and comfort with cash flow (48% vs. 65% in Midwest, 61% in South, 63% in West). These scores are at least 12 points lower than other regions.
- More Northeastern small businesses appear hopeful than other regions about the coming year. Across regions, those in the Northeast are most likely to predict an increase in revenues over the next year (56%, up nine points from last quarter). Northeast small businesses also are more likely to plan to increase investments: 37% of Northeastern small businesses report an expected increase in investments for the next year (compared to 31% of small businesses nationwide planning to do the same).
- Northeastern small businesses are most pessimistic about a speedy return to normal for the small business climate: 65% believe it will take six months to a year to return to normal. Northeastern small businesses are least likely to report seeing a healthy national (23%) or local (22%) economy.
- Northeastern small businesses are even more likely to say additional federal relief funds would be important to their ability to succeed in 2021. 87% in the Northeast say funds are needed vs. 74% nationwide.
The regional Small Business Index score for the Northeast is 52.4, the lowest for all four regions surveyed. This compares to the Midwest (53.4), the South is (53.1), and the West (52.7).
Nationally, the current Small Business Index score is 52.9 (a slight increase of 2.6 points from 50.3 in Q3). However, the new score remains substantially below findings before the pandemic struck: the Index score was 71.7 in Q1 of 2020, based on data collected before the full economic impact of the coronavirus set in.
About the Small Business Index
The MetLife & U.S. Chamber of Commerce Small Business Index is part of a multiyear collaboration by MetLife and the U.S. Chamber to elevate the voice of America’s small business owners and highlight the important role they play in the nation’s economy. The initiative produces the quarterly Index, which is a survey of 1,000 small businesses to take the temperature of the sector, see where small business owners are confident, and where they are experiencing challenges.
From April – July 2020, MetLife and the U.S. Chamber of Commerce had switched to producing a special monthly coronavirus report, the Small Business Coronavirus Impact Poll. To read those reports, 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.
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com. Please visit www.sbindex.us for the full results and methodology.