Due to “cumulative pressures” from inflation, rising interest rates, fears of a recession and bank failures, small business owners surveyed by Alignable are experiencing waning optimism. Those surveyed see lower sales, profits and customer numbers – resulting in struggles to pay rent.
Chuck Casto, director of research, corporate communications and news at Alignable, said the current state of small business “can best be summed up in two words: financial regression. Casto said the study tapped 4,235 randomly selected small business owners. He said historical responses from an additional 695,000 small business owners were also included in the report.
The survey found that 74 percent of respondents are concerned about rising interest rates, while 27 percent said current interest rates have already hurt their businesses. Alignable stated in the report that “only 34 percent of small business owners are making as much or more profit than they did before COVID-19, now three years after its initial impact. And that statistic is down four percentage points from 38 percent [in the January report].”
Casto said the states with the lowest recovery rates were Kentucky, Georgia, New York, Washington, Illinois, Texas and California. By industry, the worst recovery rates were transportation, events, gyms, arts, retail traderestaurants, beauty salons and real estate.
“While 53 percent remain more optimistic about 2023 than 2022 (down three percentage points from 56 percent in January), pessimism has increased by seven percentage points from 14 percent in January to 21 percent now,” Casto said.
Meanwhile, declining profits due to persistent inflation is a major concern. 75 percent of respondents said inflation continues to hurt their business. And it’s not just the bottom line. Forty-eight percent of respondents said they earned “half or less of the sales they generated monthly before COVID-19. That’s nine percentage points worse than it was in January at 37 percent,” Casto said.
As a result, 39 percent of respondents said they could not make rent, which is 9 percentage points higher than in the January survey. Additionally, 53 percent of respondents said they were paying more for rent compared to six months ago.
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