A seamstress works at a sewing machine in a tailoring shop in Palm Springs, Calif. Photo: Robert Alexander/Getty Images.
U.S. macroeconomic data is broadly improving but many small businesses are facing a perilous recovery as they attempt to stay afloat after coronavirus-driven lockdowns throughout the country. That's true even for the many that received government assistance.
By the numbers: A recent poll of 7,317 small business owners by Alignable finds that 43% of firms that received money through the Paycheck Protection Program (PPP) say they could be out of cash in a month or less.
- That's largely because they spent all of the money in the first eight weeks after receiving it so they could qualify to have the loans forgiven.
Details: 69% of small businesses that did not receive PPP funding say they expect to be out of cash reserves next month.
- 76% of minority-owned businesses that did not receive PPP funding say they will run out of cash in July — with 52% saying they have already depleted their reserves.
The big picture: With stores back open, Americans have increased spending from April and May's depressed levels, but that may not be enough.
- An IBM Institute for Business Value survey poll of more than 18,000 U.S. consumers in May and early June found that 21% of consumers say they're shopping less and more than half believe the country will experience a major economic downturn over the next year or more.
- This could mean spending plateaus or even declines after this month rather than accelerating.
Between the lines: Some of the businesses left behind are expecting to lose significant revenue.
- Total travel spending in the U.S. is predicted to drop 45% by the end of this year, according to a forecast prepared for the U.S. Travel Association by the company Tourism Economics.
- That includes a decline in domestic travel spending of 40% (from $972 billion in 2019 to $583 billion in 2020) and a 75% fall in international inbound travel spending (from $155 billion to $39 billion).
One level deeper: A trade group representing health and fitness clubs says the industry lost $5.6 billion from mid-March through June 1, and will continue to lose $350 million per week through the end of the year.
- "Even when open and for the foreseeable future, clubs will be hampered by reduced income from reduced capacity safety requirements and membership cancellations," the International Health, Racquet & Sportsclub Association said in a press release.
- "Clubs that have opened are opening at 25%–50% capacity, while still having 100% of their expenses."
Go deeper: The pandemic's lost years