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New NFIB COVID Survey: Small Business Owners Impacted by Surge in COVID Cases, Supply Chains, and Staffing Shortage to Start New Year
New NFIB COVID Survey: Small Business Owners Impacted by Surge in COVID Cases, Supply Chains, and Staffing Shortage to Start New Year
January 13, 2022
New NFIB COVID Survey: Small Business Owners Impacted by Surge in COVID Cases, Supply Chains, and Staffing Shortage to Start New Year
- The recent increase in COVID-19 cases has negatively impacted about two-thirds of small business owners to varying degrees.
- Eleven percent of owners reported the surge in COVID-19 cases has a significant impact on their business, 23% reported a moderate negative impact, and 34% a mild negative impact.
- Of those negatively impacted, 19% reported that the rise in cases is significantly impacting employee work attendance. Twenty-three percent say that it’s moderately impacting work attendance, and 34% report a mild impact.
- Related to sales, 10% of owners negatively impacted reported that the recent surge is significantly impacting sales, 26% report it is moderately impacting sales, and 34% report the increase is mildly impacting sales.
- Nearly half (47%) of small business owners reported supply chains had a significant impact on their business, 27% reported it having a moderate impact, and 18% said it had a mild impact. Eight percent reported supply chain disruptions not an issue.
- Forty-four percent of small business owners who are experiencing disruptions say that the disruption is worse not than it was three months ago, a decline from 62% in October.
- The vast majority (87%) of small business owners anticipate the supply chain disruption that is impacting their business to continue for five months or more.
- Twenty-three percent of small employers are currently experiencing a significant staffing shortage and 20% are experiencing a moderate staffing shortage.
- Of those employers currently experiencing a staffing shortage, 14% are experiencing significant loss of sales opportunities and 23% report moderate loss of sales opportunities.
- The severity of lost sales opportunities has lessened since late October likely due to more owners successfully adjusting operations to accommodate demand.
- The staffing shortage is not easing for most small employers as 45% reported that their current staffing shortage is about the same as it was three months ago. One-quarter of small employers reported it being worse and 5% reported their current staffing shortage is better than it was three months ago.
- Small employers facing staffing shortages are making adjustments to attract applicants for open positions: 83% increased wages, 24% increased paid time off, 20% offered or enhanced hiring bonuses, 24% offered or enhanced referral bonuses, and 29% offered or enhanced health insurance benefits.
- Small employers are also making business operations adjustments to compensate the staffing shortage: 43% are offering more hours to part-time employees, 61% are offering overtime to full-time employees, 88% reported that the owner(s) are working more hours, 38% have resorted to more drastic measures with adjusting business operation hours, 33% introduced new technology to enhance productivity, and 29% reduced the variety of goods and services sold.
- Sixty-four percent of small business owners have increased their average selling prices due to supply chain disruptions and/or increased compensation due to staffing shortages.
- Of those owners who raised prices, 41% have raised prices by 10% or more and 29% have raised prices 5% – 9.9%.
- Just over one-third (36%) of small businesses are at or exceeding pre-crisis sales levels, a 10-percentage point increase from early September when 26% of owners reported the same.
- Thirty-two percent of owners are nearly back to where they were with sales 75% – 99% of pre-crisis levels.
- Most small business owners reported that their local economy remains below pre-crisis levels of economic activity.
- Only 21% of owners reported that economic conditions are back to normal now in their area.
- Thirteen percent of owners anticipate an economic recovery in their first half of 2022 and another 27% report the second half of 2022 before economic conditions return to pre-crisis levels. Thirty-nine percent of small business owners expect conditions not to fully improve until 2023 or later.
- About one-third of small business owners reported that they received a second-draw Paycheck Protection Program (PPP) loan in 2021.
- The vast majority of owners (84%) have applied for PPP loan forgiveness applications for their second PPP loan.
- Only 14% of small employers reported they are very familiar with the Employee Retention Tax Credit (ERTC) and another 34% are somewhat familiar.
- Thirteen percent of small employers claimed the ERTC for wages in 2020 and another 12% claimed the ERTC for wages in 2021.
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