A new survey by Facebook parent Meta Platforms finds that one in five small businesses worldwide, or 20%, reported they were not operational or engaging in any revenue-generating activities in January, a slight increase from 18% in July 2021.
Meta’s Global State of Small Business Report, which was conducted when many parts of the world were seeing a surge in COVID-19 cases due to the omicron variant, covers responses from nearly 24,000 small business leaders across 30 countries and territories.
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Minority and female-led small businesses across the globe continued to be disproportionately impacted by the pandemic, with about 26% of minority-led and 25% of female-led small businesses reporting being closed in January.
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In the United States, approximately 22% of surveyed small businesses reported being closed in January, up 6 percentage points since July 2021.
Closure rates varied across states, thought most saw increases. Rates were highest in Texas (27%), Pennsylvania (26%) and Tennessee (25%). Increases of over 10 percentage points were observed in Massachusetts (22%), New Jersey (22%) and Wisconsin (21%). Washington was the only state to experience a drop in the closure rate of more than 3 percentage points, with 7% of the state’s small businesses reporting closures in January compared to 14% in July 2021.
Despite the increase in closure rates, 30% of small businesses surveyed worldwide reported higher sales in January 2022 compared to the previous year, up from 28% in July 2021.
In the U.S., 36% of small businesses reported higher sales in January 2022, compared to 44% in July 2021. Pennsylvania saw 55% of small businesses report higher sales, followed by Texas (42%) and North Carolina. Meanwhile, another 36% of U.S. small businesses reported lower sales, up 2 percentage points from July 2021. Ohio reported that 52% of its small businesses saw lower sales, down 20 percentage points from July 2021, followed by Illinois with 46% reporting lower sales, down 16 percentage points.
Black-owned small businesses are facing record levels of lower sales, with 51% reporting January sales were lower than the same month a year ago.
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Changes to employment have remained stable since July 2021, with 41% of small businesses globally reporting that they had hired at least some of their current workforce during the pandemic and 11% reporting increased employment.
In the U.S., just 9% of small businesses surveyed reported increased employment. The largest increase was in Ohio, with 19% of small and businesses increasing employment, up from 6% in February 2021. Pennsylvania, Tennessee, Florida and North Carolina also reported increases of 14%, 13%, 11% and 10%, respectively.
Approximately 37% of U.S. small businesses reported hiring employees since the pandemic began, with 20% hiring half or more of their current employees during this period. Approximately 15% stated that over half of their hiring activity consisted of rehiring workers who were previously laid off or placed on furlough. Small businesses making new hires were greatest in Texas (47%) and Pennsylvania (47%) and lowest in Illinois (25%) and Washington (26%).
In comparison, 24% of U.S. small businesses indicated decreased employment due to COVID-19 and 67% reported stable employment levels since the start of the pandemic. The highest rate of decreased employment was in Missouri (36%), Texas (34%) and Washington (34%).