Small businesses (less than 500 employees) account for around 50% of total private payrolls. The broad virus initiated and widely mandated "stay at home" orders across most states are having an extreme negative impact on small businesses, all business for that matter. In today's NFIB Small Business Optimism release, the Optimism Index fell 8.1 points to 96.4, the largest decline in the survey's history. It should be noted most of the survey responses were obtained in the first half of March.
Several notable highlights from today's report:
- "The NFIB Uncertainty Index rose 12 points in March to 92, the highest level since March 2017."
- "Reports of better business conditions in the next six months declined 17 points to a net 5%, which is the largest monthly decline since November 2012.
- "Real sales expectations in the next six months declined 31 points to a net negative 12%, the largest monthly decline in the survey’s history."
Again, most responses were gathered in the first half of March, but the most consequential item from the report is the one related to the viability of a large cross section of these small businesses. Noted in the report was the comment, "about half of small employers said they can survive for no more than two months under the current business conditions." And it is reasonable to say business conditions have worsened since mid-March. The sooner the "stay at home" mandates are relaxed, the greater the odds of a more favorable economic recovery.
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