RALEIGH – Small businesses are being hammered by the COVID-19 crisis with owners’ optimism dropping sharply and as a result the National Federation of Independent Business is calling for stepped-up government aid.
“The economic impact is immense, and now, the questions are how long will it last and how quickly can the small business sector recover once on the other side,” the NFIB says.
And many owners don’t expect a return to good economic times soon.
“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,” NFIB says.
North Carolina is not immune to the crisis, either, with recent unemployment claims topping 300,000.
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“Small businesses everywhere are hurting,” declared NFIB North Carolina Director Gregg Thompson in summing up the group’s latest monthly survey covering March.
“They’re facing an unprecedented crisis that is not of their own making, but hopefully, they’ll be able to get the relief they need so they can get through this.”
The overall index from the NFIB fell 8 points, ending a streak of optimism dating back 39 months.
As this chart indicates, optimism fell in all but one survey category:
NFIB graphic
The federal government has responded with some $4 trillion in relief packages offering a variety of help such as loans that can be forgivable.
But in commentary accompanying the latest report, the NFIB noted: “Many owners have had to close their doors and others are scaling back operations dramatically.”
The survey did note cuts in interest rates by the federal reserve, thus reducing borrowing costs as well as the legislation signed into law by President Trump. “The policy response has been immense,” the NFIB says.
But the group also notes that businesses “are finding it difficult to submit applications for the new Paycheck Protection Program loan or receive timely financing through the SBA’s Economic Disaster Loan program.”
“Small businesses are living through the coronavirus pandemic right now and it’s hard to say what the severity of the disruption will be, but we do know they’re feeling the urgency,” said NFIB Chief Economist William Dunkelberg in a statement. “It is vital that these businesses have access to federal funds that are made available through the CARES Act to keep the doors open on Main Street.”
This chart indicates the drop in overall optimism, “the largest monthly decline in the survey’s history.”
NFIB graphic
