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We had forecast this would happen when governments began ramping up the COVID War 2.0 in May. Two new surveys have found small businesses’ confidence in the economic future has plummeted.
The COVID virus’s surging Delta variant is forcing six in ten small businesses to alter their plans and outlook for the rest of this year, according to a survey of more than 2,000 business owners by CNBC and Momentive Small Business.
In the survey, small business confidence is languishing at a meager 45 out of 100, the same outcome as during this year’s first quarter and about 25 percent below the 61 rating reported from the first quarter of 2020.
In a Wall Street Journal survey of 560 small businesses, 39 percent of owners said they expect the U.S. economy to improve over the next 12 months, compared to 50 percent in July and 67 percent in March.
The proportion of business owners expecting conditions to worsen rose from 15 percent in July to 20 percent in August, the survey found.
Business owners’ outlook for their own investment and hiring was its most pessimistic since March, the WSJ said.
More than half have raised prices and 61 percent plan to, either again or for the first time.
Businesses with fewer than 500 workers employ 47.1 percent of the U.S. labor force, the WSJ noted, and showed stronger hiring so far this year than larger companies, the Bureau of Labor Statistics said.
Among firms with $1 million to $20 million in sales, 22 percent told the WSJ survey that their business already had been adversely affected by the resurging COVID virus and another 22 percent expect to be.
In the CNBC survey, a quarter of the general public has changed its view of the future “a lot,” the survey found, with 41 percent reporting “a little” shift in their outlook, and 32 percent saying current conditions are making no difference in their expectations for the rest of this year.
Forty-eight percent of businesses in the arts, entertainment, and recreation can survive another year under present conditions, the survey found, the lowest proportion of any of the sectors surveyed.
Complicating their future, New York, San Francisco, Los Angeles, New Orleans, and other cities are implementing mandates that gyms, bars, restaurants, and similar venues require proof of vaccination for anyone entering.
Disney, United Airlines, and Walmart are among large employers requiring workers on-site to be vaccinated.
“Even with mask adoption and vaccine passports, the public’s concerns about the Delta variant could still shift as the perceived risk ebbs and flows,” CNBC commented. “Small businesses will have to continue to adapt.”
TRENDPOST: Once again, as small businesses continue to go down, the larger companies will step in to take their place, their customers, and their market share, as we noted in “Bigs Get Bigger, Mom and Pops Go Bust,” in our 25 May, 2021 issue.