Facebook has published a new report to see the impact of COVID-19 on small and medium-sized businesses, or SMBs, worldwide.
The report highlights the anxieties and difficulties they face as they seek to keep their businesses afloat.
“Impacts on SMBs can have wider ramifications for the macroeconomy: on average, SMBs account for 75% of employment in sectors directly affected by lockdown measures across OECD member countries,” says Facebook.
The complete Global State of Small Business Wave VI update is found here.
Here, we explore a few key data points and charts from the report.
SMBs Closure Rates
Facebook’s report shows that SMB closures are declining. Fewer businesses shut down due to the pandemic in the latest period.
Closures in Sub-Suharan African and some European regions increased.
Facebook saw substantial changes in Israel and the Czech Republic. Both regions have reinstituted strict lockdowns.
Many European nations have reimposed lockdown measures amid overloaded healthcare systems. And it will see enduring impacts in the next update.
Yearend sales may help offset losses. But in this period, about half of businesses reported a substantial drop in sales activity.
Here the situation is improving. But millions of open businesses could not meet the same sales volume as last year.
Facebook notes that the loss is dropping.
“In Wave I, among businesses that reported a drop in sales, 57% of firms reported a decline of more than 50% relative to the same 30-day period in 2019. At the time of the Wave VI survey, the relevant proportion had decreased by 10 percentage points, to 47% of SMBs,” says Facebook.
We see a major decline in sales. But the overall loss situation has improved. We expect the Christmas sales period to ease these impacts.
Facebook’s data shows that the number of SMBs reporting a reduction in staff has remained fairly steady.
“In aggregate, the proportion of businesses that reported a reduction in employment in response to the pandemic remained at just over one-third (34%) in Wave VI. This proportion has stayed largely stable in each wave, increasing by 1 percentage point since Wave I in May,” says Facebook.
More businesses are reducing their staff hours over time. But the impact is improving—a positive sign for the broader economy.
Still, the Christmas period will help determine the overall effect. And many businesses have relied more into ecommerce and online sales. How will that impact future staffing levels?
Will COVID-19 reduce the need for low-skilled positions due to shifts in the B2C process?
You can download the full State of Small Business: Wave VI update here.