Small businesses continue to struggle financially, and many are facing greater challenges with managing supply chain challenges and hiring enough workers, according to a survey released Tuesday by the Federal Reserve.
While some small businesses have seen their revenues increase, the recovery has been uneven, with smaller firms and those owned by racial minorities seeing fewer gains, the report showed.
“Many small businesses have not recovered to pre-pandemic levels, with the effects of the pandemic hitting disproportionately hard among firms in the leisure and hospitality sector, smaller firms, and firms owned by people of color,” Fed researchers said in a statement.
The survey, which was conducted between September and November of 2021, found that 63% of firms still had revenues below pre-pandemic levels, and 43% of businesses had lower employment. The Fed polled nearly 11,000 small employers across the country that have less than 500 workers.
Businesses are having a hard time finding enough workers and resolving supply-chain issues, the survey found, with 60% of firms naming hiring issues and 60% listing supply-chain issues as a top operational challenge faced over the past 12 months.
The report, done in collaboration with the 12 regional Fed banks, found that many small businesses are still in rough financial shape because of the pandemic.
More than half, or 59%, of firms surveyed said they were in “fair” or “poor” financial shape, nearly unchanged from 57% a year earlier, according to the report.
Those outcomes continued to vary by race. Some 55% of white-owned businesses described their financial condition as “fair” or “poor.” But that rose to 81% of Asian-owned businesses, to 76% for Black-owned firms and to 74% for Hispanic-owned businesses, similar to last year.
Copyright 2022 Thomson/Reuters