Economic / Future Trends

Small business optimism stalls amid pandemic resurgence [WSJ/Vistage Oct 2020]

small business confidence cover


  • The WSJ/Vistage Small Business CEO Confidence Index rose marginally to 90.2 in October.
  • Small business optimism about the U.S. economy softens with 53% expecting the economy to improve in the next 12 months, a 3-point decline from last month
  • Four-in-10 small businesses have brought employees back to the workplace; 15% are waiting until 2021 and 12% are uncertain
  • Nearly one-third (31%) of small businesses who have or are planning a return to the workplace are offering employees a voluntary return option.
  • The majority of small businesses — 93% — are not requiring coronavirus testing

Download the October report for the complete analysis

After a large gain in September, the WSJ/Vistage Small Business CEO Confidence Index rose only marginally to reach 90.2 in October 2020. While this is above October of 2019, when the Index was recorded at 89.9. As Dr. Richard Curtin, a researcher from University of Michigan who analyzed the data notes, “While a reading above last year seems optimistic, October 2019 was a six-year low in small business confidence. To be sure, small businesses had already anticipated an extended period of slower economic growth, but the renewed slowdown in the pace of economic growth surprised many small businesses last year.”

Download full October 2020 report infographic

The slowdown in momentum in this month’s Index is due to uncertainty in the future of the U.S. economy; 53% of small businesses reported expectations that the economy would improve in the next 12 months, slightly lower than September’s 56%. 

All other factors that comprise the Index improved from last month, most notably the continued decrease in pessimism about the U.S. economy; 81% of small businesses reported that the economy recently worsened compared to 83% last month and 88% in August.

Recovery varies for small businesses

The timelines for recovery vary among small business survey respondents. While 45% of small businesses reported that recovery of their business would take six months or longer, on the other end of the spectrum, 35% reported that their businesses had already improved or suffered no losses due to the pandemic.

Dr. Curtin notes that “These results parallel other descriptions of the pandemic downturn, the so-called ‘K’ pattern, whereby some have benefited from working at home without loss of income, and others have suffered devastating losses of jobs and incomes. The dividing line for small businesses is the type of product or service they provide, with travel, entertainment, restaurants, theaters and other similar service sectors suffering the largest and most sustained losses. The ability of small businesses to ultimately survive reflects their demonstrated entrepreneurship and willingness to adapt to whatever changes may take place.”

Divergent plans for return to work

Nearly 60% of small businesses report having employees in the workplace. While the majority of respondents indicate that employees have started returning to the workplace (40%), or never left (19%), 27% still are waiting either due to uncertainty (12%) or plans to wait until 2021 (15%).

For small businesses that are leveraging remote working as an option during the pandemic, their return to work plans largely offer flexibility to keep employees safe. Nearly one-third (31%) of small businesses are offering a voluntary return, others are focused on reducing those in the workplace through phased scheduling or only requiring certain roles to return. Certainly rising cases and new restrictions will impact these plans in the coming months.

The October WSJ/Vistage Small Business CEO survey was conducted October 5 – 12, 2020 and gathered 662 responses from CEOs and leaders of small businesses with revenues between $1 million and $20 million. Our October survey, in the field November 9 – 16, 2020 will capture post-election sentiment of small businesses.

Download the October 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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