New research highlights that the recession isn’t over for small businesses despite signs of improvement for larger companies.
It’s been nearly a decade since the recession began—and yet the majority of small businesses are still recovering. In fact, only 21 percent of small business owners have completely recovered, while nearly two-thirds are looking to get back to where they once were, according to a new Bank of America survey.
These findings mirror a recent Goldman Sachs report. The report highlights a “two-speed” recovery, which says that “large corporations have performed well, generating strong revenue growth, rising employment and robust wage growth. Small firms, in contrast, have suffered low rates of business formation and tepid employment growth. Employees of small firms have also seen significantly weaker wage growth than employees of large firms have enjoyed.”
The amount of small businesses has also declined in the years since the recession—the only such decline since the U.S. Census Bureau data became available in the 1970s, The Wall Street Journal reports.
The AP reports that retailers and homebuilders are among the sectors that still have revenues below pre-recession levels. Part of the reason for retailers’ continued struggle is a result of weak consumer spending; a homebuilding rebound could help improve that spending, the article says.
As both the AP and Goldman Sachs suggest, small business lending remains a problem that inhibits recovery. In a Pepperdine University survey, 63 percent of small businesses said it was difficult to get loans, compared to just 36 percent of larger companies.
The most plausible explanation for the disparity between the recoveries for large and small companies, according to Goldman Sachs researchers: new regulations—something small business owners know all too well.
