Trounced by the colossal blow of the coronavirus, optimism among American small business owners has plummeted to its lowest mark in three years.
A new survey by CNBC and SurveyMonkey revealed that small business confidence has dipped to a record low since the survey began recording the Small Business Index in the second quarter of 2017. The index fell from 61 out of a possible 100 in the first quarter to 48 this quarter.
Just 18% of smaller business owners—less than one in five—report current business conditions are “good,” down from 56% in the first quarter of 2020. At the same time, 43% of small business owners contend that conditions are “bad,” a figure that before had never been above 11%.
On a quarterly basis, CNBC and SurveyMonkey poll more than 2,000 small business owners to help measure the vitality of the U.S. economy along with trying to gain a view from Main Street on jobs, taxes, and other topics.
The latest analysis from the Q2 2020 CNBC/SurveyMonkey survey uncovered key findings:
- Some 72% of all small business owners say the coronavirus outbreak is likely to have permanent effects on the way they operate. Thirty-six percent of those owners report they have cut their own pay, while about one quarter have either laid off or furloughed employees. Some 52% of businesses that laid off or furloughed employees expect to hire all of them back once things return to “normal.” Around 37% plan to hire “some” employees back, while 9% say the jobs are lost forever. The crisis has also bought good prospects, with 7% of small business owners reporting they have pivoted their firms to offer products or services to help fight the pandemic.
- Fifty-two percent of small business owners approve how President Trump is handling his job, down 12 points from 64% in the first quarter.
- Over three quarters of small business owners with five or more employees say they’ve applied for “Payroll Protection” loans from the U.S. Small Business Administration. Some 20% of the firms received funds, while those with 50 or more employees are more likely than their smaller peers to already have obtained funding.
The SBA program, the Paycheck Protection Program, was launched in April in two phases. The federal government’s roughly $660 billion loan program was intended for businesses with fewer than 500 workers. Firms can use the forgivable loans to help cover payroll and operating costs.
The CNBC/SurveyMonkey data, announced on May 4, consisted of some stunning revelations.
“The totality of the quarter-to-quarter change is unlike anything we’ve ever seen, with every marker of confidence plummeting at once,” Jon Cohen, chief research officer at SurveyMonkey, said in a news release. “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.”
The CNBC/SurveyMonkey Small Business Survey was conducted via SurveyMonkey’s online platform from April 21-27, 2020, among a national sample of 2,220 self-identified small business owners ages 18 and up.