More than seven in 10 small businesses in Michigan expect further sales declines from the COVID-19 pandemic in the months ahead, according to new survey results from the Small Business Association of Michigan.
The results from surveys SBAM conducted from Sept. 15-24 with 650 small business owners statewide shows the pandemic continues to take a deep toll on sales. Lost sales and profitability were the biggest issues for survey respondents.
Three-quarters expect at least a 10 percent reduction in sales in the coming months, and 17 percent projected their sales would decline by more than half, “which is obviously a very catastrophic result,” SBAM President Brian Calley said.
“At this point, we’re well into our sixth month of a global pandemic that has disrupted nearly every facet of daily life. It’s no surprise that’s weighing heavily on small businesses throughout the state,” Calley said in a statement.
Confidence among small business owners was better than in May, when one in seven small business owners doubted whether their company would survive the COVD-19 pandemic and resulting closures ordered by the state
In the new survey, one in 10 respondents to the SBAM survey remained unsure if their business would survive the pandemic, although “the big caveat is this obviously doesn’t include the ones that already went out of business,” Calley said Monday during an online briefing.
Half of survey respondents indicated they now employ fewer people than in February, just prior to the pandemic’s spread into Michigan.
SBAM CEO Rob Fowler said the survey results support the need for Congress to consider approving another round of the Paycheck Protection Program loans for small businesses that ended Aug. 8.
“The fact of the matter is that small business owners are at risk of shuttering their doors before this is all over,” Fowler said. “That is not that surprising when you consider the challenges these businesses are working to overcome. This is why the federal government needs to give serious consideration to approving additional PPP funding for our hardest hit businesses. Their struggles are dire and so are the consequences.”
The U.S. Small Business Administration approved PPP loans for more than 125,000 small businesses in Michigan that totaled $15.94 billion.
More than seven in 10 SBAM members received a PPP loan, while 19 percent indicated they may have to reduce staffing without further funding.
Nationally, nearly all of the small and mid-sized businesses PNC Bank surveyed said PPP funding was important, and seven in 10 described it as “extremely important.” Half reported a decline in sales from prior to the pandemic, and nearly one-quarter said sales declined by more than half.
About three-quarters expect “the situation won’t return to normal in the next six months,” and two in 10 “don’t ever expect a return to normalcy,” according to PNC’s fall survey of mid-size business owners and executives.
More than half said further federal stimulus funding is important for their business, and 32 percent indicated “it is extremely important,” according to PNC Bank’s survey results.
In an updated outlook issued late last week, PNC economists projected Real GDP of 25 percent for the third quarter that ends this week, driven in part by fiscal stimulus, and 5.0 percent for the fourth quarter. PNC projects Real GDP growth for the U.S. economy to slow to 4.0 percent for all of 2021 and 3.1 percent for 2022.
The outlook “presumes that the pandemic remains contained in the short run, and that a vaccine is developed and distributed in 2021, allowing for a gradual resumption of normal patterns of economic activity,” PNC economists wrote in the Sept. 25 outlook.