It’s hard to tell how long the impacts of COVID-19 will last, and how significant they’ll be on businesses, given the current state of the pandemic.
On one front, US President-elect Joe Biden has vowed to take a new approach to the pandemic, which may see a new round of lockdowns instituted across the US, and could have significant impacts on many sectors. This comes as several other nations around the world are forced back into lockdown once again as they work to reduce the demand on hospitals due to the virus’ spread.
At the same time, there’s positive news about a vaccine, which could mean that we’re on the way out of the worst of it over the next few months, if things progress as anticipated.
There’s a lot of uncertainties in both scenarios, but within this context, it’s interesting to look at Facebook’s latest State of Small Business report, which provides insight into how SMBs are being affected by the pandemic, and how those impacts are changing over time.
The latest update is the fifth installment of Facebook’s State of Small Business report. The Social Network has been tracking the data from a range of SMB’s around the world throughout 2020, in order to gauge how business conditions are faring in the challenging conditions of 2020.
The latest report is not overly positive – first off, on closure rates, Facebook’s data shows that many businesses are still being forced to shut down due to the pandemic, with only Europe and Latin America seeing a reduction in business closures within the latest period.
And the stats for Europe are likely to change – as noted, many European nations are now heading back into strict lockdowns, which will further impact consumer spending.
Again, the full impacts of the pandemic are still impossible to predict, with more and more businesses, over time, having to reassess their capability to weather the financial storm.
That said, most regions are reporting steadier impacts on sales overall, according to this update:
Those impacts are still significant, but for the most part, they’re not worsening.
Again, the latest lockdowns will have an impact, but countered with increased spending leading into Christmas, there is some positivity here, and some signs that more businesses will be able to hold on.
This chart further reflects the gradual flattening of the sales curve on this front:
As you can see, micro-businesses – or SMBs operated, for the most part, by one or two people – are still seeing significant declines, but businesses with up to 10 employees are faring a little better over time.
Employment trends, however, don’t show much sign of respite, with most SMBs reporting a further reduction in employment in the latest period.
As noted, there are many concerns, and with the vast majority of business activity coming from SMBs, the expanded impacts are also impossible to predict.
The hope is that we’re getting close to a vaccine, and the next stage of moving past the pandemic, but the numbers here show that the incremental impacts will continue to weigh the economy for some time.
That will pose significant challenges. Many will be looking to the current holiday spending period to give them a boost, but after Christmas, once the sales rush is over, we’re likely to see even more impacts as businesses assess where they’re placed, and if they can hold out till we reach the next stage.
The vaccine can’t come quick enough in this respect, and hopefully, those positive results will provide some hope for SMBs heading into the new year.
You can read the latest Facebook State of Small Business report here.