RALEIGH — Two years since COVID-19’s outbreak, eight out of 10 North Carolina small businesses say they’re still open and “revenue generating.” But significant headwinds remain, according to Facebook parent Meta’s latest Global State of Small Business Report.
A quick look at the numbers shows the bright side: 82% reported they were operational – 4% higher than the national average. Of those, 68% are “confident” to continue operating for another 12 months, while 54% reported making at least a quarter of their sales digitally – a 17% jump from last summer. Only 11% expect challenges with lack of demand.
“The new data suggests North Carolina businesses are continuing to adapt to the new ‘digital mainstreet’ way of doing business,” the report said.
On the flip side: Many of the state’s small businesses are still facing “economic challenges,” with 23% expecting cash flow issues and 24% forced to reduce employment.
Inflation warning: It’s going to get even worse, says UNC economist
Steve S. Rao, who serves on the NC League of Municipalities Race and Equity Task Force, said he’s witnessing this firsthand in his town of Morrisville.
“I continue to see restaurants, dry cleaners, movie theaters, and other small businesses struggle to get back to pre-COVID revenue levels and growth,” he wrote in TechWire last week. “Labor shortages also are hindering growth.”
The hardest hit
On a national level, the survey consistently found that women and minority-led businesses have been hit the hardest during the pandemic.
In the US, both categories saw a 6% increase in closures – to 25% for women-led businesses and 26% for those led by minorities. Black-owned businesses also faced troubling drops in sales. Just over half said sales were down on last year, compared to 36% of other US small businesses, the report said.
“These disparities show just how important it is to continue efforts to support Black and minority-owned businesses,” Meta’s chief operating officer Sheryl Sandberg said in a statement.
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Meta, Facebook’s parent company, surveyed 23,840 business leaders in 30 countries and territories, including 5,324 U.S. business leaders in January 2022. At the time, many parts of the world were seeing a surge in cases due to the Omicron variant.
Future is uncertain: UNC economist
Since then, inflation has skyrocketed to 7.8% in February – the highest since 1981. And it could get even worse, according to UNC-Chapel Hill’s Kenan Institute chief economist Gerald Cohen.
With Russia’s invasion of Ukraine pushing up prices for everything from fuel to food, he estimated energy prices will raise inflation “by another percentage point” in March.
“If sustained, the runup in gas prices will take a $100 billion-sized bite out of households’ wallets, weighing on consumer spending – and ultimately, inflation,” it was reported in WRAL TechWire this week.
Coupled with continued supply chain disruptions and labor shortages, the outlook for small businesses and family households – across North Carolina and the country – remains uncertain, he said.
