Half of U.S. Firms That Survived Are Back to Pre-Covid Capacity
(Bloomberg) -- For the second week in a row, a majority of small firms in the U.S. reported they’re operating at a pre-pandemic capacity or higher.
During the last week of February, 52.6% of firms said that their operating capacity, or maximum amount of activity the business could handle, was at least back to pre-Covid-19 levels, according to the U.S. Census Bureau’s Small Business Pulse Survey.
The data still point to an uneven recovery, with industries such as restaurants and education services remaining in great distress. The results also don’t take into account the millions of businesses that have closed over the past year.
The latest survey covers the week of Feb. 22 to Feb. 28. The Census Bureau started the survey after the pandemic hit to provide a glimpse into the condition of businesses with fewer than 500 employees, a sector that employs almost half of the private workforce and is key driver of the overall economy.
Here are some key findings from the survey last week:
More than nine in ten accommodation and food services firms are still suffering from the Covid crisis. There are a few bright spots: About 18% of retailers reported a positive impact on their overall business.
The arts and entertainment sector is showing some life, as almost 3% of those firms reopened a closed location last week. A tiny fraction of hotels and restaurants, 1.8%, also reopened a location.
As the massive campaign of vaccination has still a long way to go in the country and states like Texas and Mississippi already are lifting activity restrictions, about 11% of small firms in the survey said they required employees either a negative Covid-19 test or proof of vaccination before coming to work. (Among them, only 2% are asking for vaccine proof).
The majority of businesses expect a full recovery to take longer than six months or to never happen. Once again the data show differences in the face of the health crisis. About a quarter of the firms report that no economic damage was caused by the pandemic or things have returned to normal. But among those that were hit, fewer than 4% of those surveyed expect a full recovery by June.
Three additional areas of caution:
- More firms are shedding employees than hiring. At the end of February, 8.6% of businesses reported a decrease in the number of workers while just 5.5% increased the number of paid employees. A week earlier, 5.4% added workers.
- About 27% of firms anticipate that business travel will resume in the next 6 months.
- Since March 13, 2020, more firms reduced their square footage than increased it.
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