(The Center Square) — Nearly half of U.S. small business owners say they are at risk of closing this fall, according to new survey data.
The Alignable Small Business Network released the investigationwhich found that “47% of small business owners … say their business is at risk of closing by the fall of 2022 unless economic conditions improve significantly.”
“That’s a 12 percentage point increase from last summer, when just 35% were concerned about economic issues forcing them to close,” Alignable said. “And SMBs in key industries face even bigger problems: 59% of retailers are at risk, along with 52% in construction, 51% in automotive and 50% in restaurants.”
These difficult economic conditions include runaway inflation. The US Bureau of Labor Statistics released inflation data last week showing consumer prices Pink 9.1% in the previous 12 months, the highest in more than four decades, and the BLS producer price index Pink 11.3%, almost the highest on record.
Pandemic-era forced economic shutdowns have also crushed many businesses that have yet to rebound.
“Supporting these unfortunate trends, the total percentage of SMEs reporting they have fully recovered has dropped 7 percentage points since last summer,” Alignable said. “By summer 21, 33% had been fully recovered. But now that number has fallen to a new low: just 26%.”
Prices also hit record highs for regular gasoline and diesel in June before falling back. Current prices, however, are still much higher than at the same time last year.
Amid the economic difficulties, some states are struggling more than others, with more business owners reporting they are at risk of closing this fall.
“Looking at different states and provinces, small businesses in CO (54%), MI (52%), OH (51%), PA (51%) and Texas (51%) have the more difficulties,” Alignable said.
Two other recent surveys have also raised alarm bells about small business owners’ feelings about the economy, as The Center Square previously reported. In June, Alignable published a investigation showing that 35% of US small business owners “couldn’t pay their rent in full or on time in June.”
“Most small business owners attribute this worsening situation to record inflation, which includes escalating gas, labor and supply costs,” Alignable said. “Put simply, there is less money available to pay the rent.
“Even more alarmingly, 63% of transport SMEs could not afford June rent, up 41% from May,” Alignable added. “It’s no shock to learn that 76% of this group said gasoline prices had a ‘very big’ negative effect on their business.
Another one survey published at the end of June, that of the Small Business and Entrepreneurship Council, showed that 88% of small businesses fear that a recession is imminent.
“There is little wiggle room for our country’s small business owners and their employees,” said SBE Council President and CEO Karen Kerrigan. “They’ve gone through one set of economic challenges over the past couple of years, and now they’re dramatically cutting spending and investment, which will have a detrimental effect on the whole economy.”