Small business confidence drops to record low: Survey
US pay television business news channel CNBC and leading global survey software firm SurveyMonkey announced on Monday the results of their quarterly Small Business Survey, according to which small business confidence has plunged to an all-time low since the survey started recording the Small Business Index in the second quarter of 2017.
According to a press release US and Global News received from NBCUniversal, the owners of CNBC, the index dropped from 61 out of a possible 100 in Q1 2020 to 48 this quarter thus far.
Eighteen percent of small business owners, or fewer than one in five, say present business conditions are “good,” down from 56% in the first quarter. At the same time, 43% say conditions are “bad. It should be noted here that 43% is a number that had never been higher than just 11% previously.
SurveyMonkey and CNBC poll more than 2000 small business owners each quarter to assess the US economy’s vitality and the Main Street view on taxes, jobs and other burning matters. Thanks to the large sample size, CNBC is able to find out trends among particular small business groups and by geographic region as well as measure small business confidence all over the country.
Three major findings of the survey are:
- President Trump’s approval rating among small business owners drops 12 points.
- Over three quarters of small business owners who have five or more employees say they have applied for Payroll Protection loans.
- The ongoing pandemic will have a long-term effect on small businesses.
Trump’s approval rate
Fifty-two percent of small business owners approve of Trump’s job, down from 64% in Q1. Approval among self-identifying Republicans who were small business owners was unchanged at 93% though.
Among self-identifying Independents Trump’s disapproval increased to 59%, while among self-identifying Democrats, 93%.
Applied for pay protection loans
Of the owners who applied for Payroll Protection loans from the Small Business Administration, 20% have received funds.
The survey finds that firms that have 50 or more workers on the payroll are more likely to say they have received loans already, compared to smaller companies.
Coronavirus’s impact
Seventy-two percent say the pandemic will likely permanently affect the way they run their business.
Thirty-six percent say they have cut their own pay, while approximately one quarter say they have either furloughed workers or laid them off.
Fifty-two percent of firms that have furloughed workers or laid them off say they expect to rehire them as soon as the situation is “normal” again. 37% plan to rehire “some” workers, while 9% say the jobs are gone forever.
Seven percent of the owners say they have pivoted their firms to offer services or products to assist in combating the outbreak.
SurveyMonkey chief research officer Jon Cohen said, “The totality of the quarter-to-quarter change is unlike anything we’ve ever seen, with every marker of confidence plummeting at once.”
He added, “Small business owners overwhelmingly see the pandemic as having permanent effects on the way they operate; the buoyant expectations from Q1 have been entirely upended.”
Image credit - Valereee (CC BY-SA 4.0)
