December 9, 2023
Compared with other large-population states, Texas appears to have been less impacted by COVID-19’s devastating economic effects, but that is not saying much.
According to a recent Census Bureau Small Business Pulse Survey, almost half of Texas small business respondents said the pandemic has had a large negative effect on business.
Unsurprisingly, that’s better than Michigan, New York, and California due to the massive difference in business restrictions.
Texas sits at the average of state responses with large negative effects at 48 percent.
Around a fifth of Texas small businesses had to reduce the number of employees on their payrolls. While the number seems low, it is because the inaugural survey period was the week ending May 2, several weeks after the peak unemployment claims.
Almost 50 percent of Texas small businesses had to continue reducing remaining employee hours. Since March 13, more than 77 percent of respondents stated that they had requested assistance from the Payment Protection Program, but only 48 percent said they received that assistance.
A quarter of respondents said they had less than two week’s worth of cash to keep business operations going. A majority of businesses—close to 90 percent both in Texas and nationwide—have avoided missing loan payments.
Retail and accommodation/food services sectors were more likely to be short on cash.
Even with lifted restrictions in Texas, these industries have a long road to recovery ahead of them. On top of normal operating costs, these businesses will have to face increased cleaning costs and limited capacity.
The overall sentiment among Texas small business owners is positive compared with the nation as a whole. Around 26 percent think business will return to normal within two to three months, while another 28 percent think four to six months. Around 29 percent believe that it would take longer than six months before normal comes back around.
Oil-dependent metros in Texas will likely see a different recovery timeline than other cities.
The Small Business Pulse Survey seeks the opinion of single-location small businesses with fewer than 500 employees and at least $1,000 in receipts. Survey responses are aggregated by nation, industry sector, and state.