Entrepreneurs are more cautious than ever as the delta variant of the coronavirus slows reopening efforts.
In March 2021, 67% of business owners were optimistic that the U.S. economy would bounce back by the end of this year. That report was published just one year after the COVID-19 surge first shuttered businesses across the country. But within the past five months, that figure has dropped sharply. As of August 2021, only 39% of business owners expect the economy to recover in the fourth quarter.
This confidence decline comes shortly after businesses ramped up over the summer. As mask mandates were dropped and establishments across the country began to reopen, revenue swelled. Consumer spending increased so quickly over the summer that shortages on thousands of products and ingredients, from french fries to used cars, drove prices for many goods to all-time highs. A few months ago, the economy seemed to be running on all cylinders. Now, the latest round of delta closures has come as a shock to many.
A larger number of business owners, up from 15% to 20%, also now believe the economy will continue to worsen before it improves. As these business owners are facing higher prices for the input goods they need, they are increasing their own prices to their customers. This impacts their projected sales and revenues for the remainder of the year as customers may struggle to continue purchasing.
Among small business owners, a recent Vistage survey revealed that 44% have already been impacted or expect to soon be affected by the increasing incidence of COVID-19 cases tied to the delta variant. Many of these small businesses have already survived a COVID-19 closure last year. Some are proactively reinstating their previous COVID-19 protection policies, like employee mask mandates and reducing occupancy, in an effort to prepare for anticipated local mandates.
With Labor Day around the corner, after which falls the expected return-to-office day for hundreds of small businesses just hanging on across the country, we’ll soon see how wide the delta variant’s impact will be.
