(CN) – With the Covid-19 pandemic’s first wave of economic pain washing over the stock markets and flooding Wall Street with uncertainty, small business owners are worried the next tsunami is headed toward Main Street.
Mom-and-pop operations are scrambling to adapt to directives barring large gatherings and “nonessential businesses” issued by concerned governors in states like California, New York and Illinois, and a new survey estimates 76% of the country’s small businesses have already been harmed by the growing pandemic.
According to the National Federation of Independent Business, 54% of members hurt by the pandemic have registered slower sales, 23% encountered supply chain problems and 68% are now “very concerned” about the ongoing financial impact on their business.
Monday’s results are a stunning escalation from a survey taken 10 days ago, where less than a quarter of the federation’s small businesses reported adverse impacts related to the coronavirus.
“The vast majority of small businesses are now impacted by the Covid-19 outbreak and owners are taking the threat to their business seriously,” the federation warned. “Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak will leave few, if any, owners unscathed.”
While slower sales are plaguing businesses still in operation, hordes of brick and mortar stores have been forced to close altogether.
Last week, California Governor Gavin Newsom ordered nearly 40 million residents to “stay at home” except as needed to maintain sectors classified by the state as “essential.” The decision forced places such as niche boutiques, specialty stores, bars and fitness centers to close their doors immediately.
Making matters worse for small business owners anxiously looking forward to re-opening, Newsom’s order is open-ended with no solid deadline.
“We will be very transparent with you and forthright in the next days and weeks on where we believe we are,” said Newsom.
The governors of New York, Illinois, Connecticut, Oregon, Michigan, New Jersey, Louisiana and Ohio have since issued similar shelter-in-place orders, and others are expected to join as the pandemic continues to spread in the U.S.
Covid-19, the new strain of coronavirus responsible for a global pandemic, has now affected more than 343,000 worldwide with 16,000 confirmed cases throughout the entire United States, according to data compiled by Johns Hopkins University. Data shows nearly 15,000 have died globally from the virus, including over 470 deaths in the United States.
The temporary shuttering of such a wide array of industries is leading to blanket lay-offs and causing financial analysts to predict dire economic scenarios: Goldman Sachs expects the economy to shrink 2.5% by June, while Deutsche Bank and JPMorgan are warning of accompanying job losses of up to 7.5 million.
Experts at the Economic Policy Institute say the “coronavirus shock” shoving the country toward a recession will cause job losses in every state, with a disproportionate impact on states with economies heavily reliant on food, hospitality and brick-and-mortar retail such as Florida, Hawaii and Nevada. The institute says states should look to mitigate job losses by increasing unemployment framework and bolstering other social support programs.
“Stopping a recession at this point is likely impossible, but actions such as these can soften the blow and help many whose lives are already being upended,” the institute noted in a recent analysis.
The federation, which has over 300,000 members, collected responses from 700 employers with 1 to 360 employees for its survey. It found 30% of respondents were planning to talk financial planning with their banks soon and that 13% had already done so.
While congress continues sparring over an economic relief package, the federation says it will continue pressing for help at the local level.
“Small business recovery will be the pathway to America’s recovery. National Federation Independent Business will continue to lead efforts to inform and engage mom-and-pop owners about developing stories and resources to help them get back on their feet,” said John Kabateck, the federation’s California state director.