Oct 7, 2020 - Economy & Business

Small businesses worry about survival

Data: Alignable; Chart: Axios Visuals
Data: Alignable; Chart: Axios Visuals

Small business owners and employees have been less sanguine about a delay in fiscal spending than stock traders.

Driving the news: A new survey from Alignable finds that many small businesses are growing more worried about "a severe cash crunch," with 42% saying they could collapse by the end of the fourth quarter.

  • Small business owners' top concern was that they would completely run out of financial reserves. 
  • 45% of all small businesses have earned 50% or less of their pre-pandemic revenue — eight months into the pandemic.
  • When asked what would help them the most right now, 35% said reducing the COVID-19 case levels to increase consumer confidence.

Heads up: Goldman Sachs economists estimate that winter weather will reduce total restaurant spending by 3%–4% and consumption by 0.2 percentage points.

  • This translates to a 0.3 percentage point hit to real GDP growth in Q4 and a 0.1 percentage point hit in Q1 next year, followed by a rebound as temperatures rise.
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