Economic / Future Trends

Gains in small business optimism slow amid COVID-19 surges, unclear back-to-school plans [WSJ/Vistage August 2020]

small business confidence cover


  • The WSJ/Vistage Small Business CEO Confidence Index grew to 78.2 in August, driven by optimistic projections for revenues and profits among small businesses
  • More than half of small businesses (52%) reported they would be impacted by return-to-school plans in their area while 14% were uncertain
  • Nearly 60% reported that local surges haven’t had an effect on business
  • Nearly 8-in-10 small businesses are not conducting mandatory or voluntary COVID-19 testing

While the WSJ/Vistage CEO Confidence Index rose for the fourth consecutive month to 78.2 in August 2020, up from the low of 44.7 in April, it remained below any other reading taken before the pandemic. The monthly gains in confidence have dramatically slowed, going from an increase of 13.6 in May to an incremental increase of just 3.2 in August. Of the factors that comprise the Index, expectations for increased revenues and profits among small businesses surveyed are what drove the incremental gains in August.

As Dr. Richard Curtin, a researcher that analyzed the data notes, “The coronavirus-induced recession has been deeper than any prior recession, and the recovery will resist the usual economic policy interventions. Indeed, it is likely to persist until effective treatments or a vaccine is available. In contrast, based on popular guidelines, positive GDP growth in the next few quarters will define a classic V-type recession. There is no avoiding the notion that this downturn was not generated by economic causes but by the coronavirus.”

How are CEOs feeling about the timeline of economic improvement? August 2020 survey respondents shared their projections:

  • 6% of small business CEOs anticipate that the overall economy will begin to improve in 1 – 2 months
  • 19% anticipate improvement in 3– 5 months
  • 44% anticipate improvement in 6 months to 1 year
  • 27% anticipate improvement in more than 1 year

School reopening presents challenges

As the country struggles to understand the current impact of the coronavirus, less than one third of small businesses (31%) report that local surges in COVID-19 cases have placed pressure on their businesses.

However, return-to-school plans are having a more significant impact, with 52% of small business leaders reporting impacts of return-to-school plans and an additional 14% were uncertain at the time of the survey. Accommodations for the workforce with school-age children may be necessary in different areas, and in response to that, more than half of small businesses (55%) reported that they are allowing employees to work from home; at the other extreme, a few small businesses (8%) reported that there would be no exemptions from the dates set for the return of employees. To help accommodate the workforce, some small businesses are offering assistance programs for finding adequate childcare, other firms designed their plans depending on the types of work performed, and many are handling accommodations on a case-by-case basis.

Optimism driven by gains in revenue and profit expectations

Expectations for revenues and profits of small businesses have substantially improved since the bottom reached in April, although the pace of those gains has declined. Despite the slower pace, it is encouraging that in August nearly three times as many small businesses expect gains in revenues over the next 12 months than expect decreases.

  • Gains in revenues were anticipated by 56% of small businesses in August, three times as many as expect decreases.
  • Rising profit expectations were reported by 48% of small business CEOs, barely above last month’s 45%, but well above the April low of 21%.

The August WSJ/Vistage Small Business CEO survey was conducted August 3 – 10, 2020 and gathered 704 responses from CEOs and other leaders of small businesses. Our September survey, in the field September 8 – 15, will continue to measure expectations of small businesses through the recovery.

Download the August report for the complete analysis

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About the Author: Anne Petrik

As Vice President of Research for Vistage, Anne Petrik is instrumental in the creation of original thought leadership designed to inform the decision-making of CEOs of small and midsize businesses. These perspectives — shared through repo

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