By Anna Peel. Originally published at ValueWalk.
The latest on the State of Small Business shows that only 29% of small businesses have fully recovered so far, down 1% from January and 14% from December. So, the majority of SMBs (71%) are unable to rebound yet, despite their tireless efforts. And they predict it could take until the second half of 2023 until everyone’s fully recovered.
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Why? The quadruple whammy of skyrocketing inflation (including gas prices & rent), growing supply chain issues, declining revenues, and a revived labor shortage are causing higher hurdles among small businesses across many sectors.
Majority Of Small Businesses Are Having A Tough Time
Based on a poll of 6,216 randomly selected small business owners surveyed from 2/19/22 to 3/7/22, here are other highlights from Alignable’s March Road To Recovery Report, released right now:
- Revenues Decline: 42% of all SMBs earned half or less of their pre-COVID monthly revenues in Feb. (4% worse than January’s number: 38%). Revenues haven’t been this low since Nov.
- Supply Chain Challenges Grow: 91% of small businesses report that the cost of supplies is higher now, up 13% from Jan. And 39% said supply costs were more than 25% higher.
- Labor Shortage Intensifies: 65% of SMBs report they’re having a tough time finding employees (up 5% from Jan.).
- Rents Spike: 46% report they’re paying more rent now than they did 6 months ago. Rent increases contributed to the number of SMBs unable to pay rent in Feb. (up 2% from Jan.).
- Inflation Worries Climb: Inflation’s the No. 1 concern among 43% of SMBs (up 13%).
- 10% Fewer SMBs Are Open: Only 68% report being fully open, reflecting a downward spiral from 73% in Jan., and 78% in Dec.
- As noted above, 71% have yet to rebound, and most saw declines since Jan. Here’s how key industries are faring:
- Transportation companies’ recovery rate was at 46% in Dec., but rising gas prices brought that number down to 29% in Jan., and 22% in March.
- Construction started at 56% in Dec., but slipped to 37% in Jan., and 32% in March. Supply chain issues and elevated metal & lumber costs are to blame.
- Real Estate: 49% of realtors reported being fully recovered in Dec., 44% in Jan., and now it’s only 32%. Lack of inventory and fears of higher interest rates are fueling these changes.
- 41% of retailers said they were fully recovered in Dec. Those rates slipped to 28% in Jan. and 25% in March.
- Restaurants are still way down on the list, too. In Dec., 32% were fully recovered. In Jan., that number plummeted to 14%. And now in March, it bounced back a bit to 17%.
See the rest of Alignable’s March Road To Recovery Report here.
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