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The Q2 2021 MetLife and U.S. Chamber of Commerce Small Business Index (SBI), released this week, finds that as more Americans receive the COVID-19 vaccine, states lift restrictions, and businesses continue to reopen, a majority (65%) of small business owners are more optimistic that the worst of the pandemic is over.
According to the poll taken April 21 – May 6, the dominant emotion small business owners are feeling about their current operating strategy is “hopeful” (44%). Thirty-one percent say they are “comfortable” and 24% say they are “concerned,” rounding out the top three current feelings.
“Small businesses are seeing real reasons for optimism this quarter and we’re seeing that reflected in the data,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “The easing of capacity restrictions due to increased vaccinations means more small businesses are welcoming more customers. Increased foot traffic equates to economic growth and that is moving our country’s recovery forward.”
Small businesses are very clear on what will help their businesses thrive: both easing COVID restrictions and more vaccinations. Small businesses say that easing COVID-19 restrictions (29%) and ramping up vaccinations in their area (28%) are the two biggest keys to their success in the remainder of 2021.
When it comes to views of the economy, positive outlooks are growing and negative ones are declining. Currently, 27% of small businesses rate the overall U.S. economy as good, up from 21% who said the same in Q1. Driving this uptick is the decreasing number of small businesses seeing the economy as bad. While 46% continue to say the national economy is poor, this is the first time this measure has fallen below 50% during the pandemic. Just last quarter, fully 60% of small businesses said the economy was poor (a drop of 14 points in one quarter).
Additional survey findings include:
- COVID habits may be here to stay. 76% of small businesses intend to keep all COVID-19 safety precautions in place until the coronavirus pandemic ends.
- In a tight labor market, employers are holding onto the workers they have. Most small businesses anticipate retaining the same staffing level (52% say they will do so this quarter versus 49 percent in Q1 2021). Thirty-two percent plan to increase staffing (same as Q1) and around one in ten (11%) plan to decrease staffing over the next year.
- Small businesses see revenue improving in the future. Over half (57%) of small businesses anticipate their revenue increasing this year, up 10 percentage points compared to last quarter, marking the most positive outlook of this metric during the pandemic.
This quarter, the SBI score is 60.0 (an increase of 4.1 points from 55.9 in Q1). Nevertheless, the new score remains below findings before the pandemic: the Index score was 71.7 in Q1 of 2020 based on data collected before the full economic impact of the coronavirus became apparent. The Index reached an all-time low of 39.5 in Q2 2020 and the Index is now up a substantial 20.5 points since then.
For more findings from this quarter, please visit https://www.uschamber.com/sbindex/.