Firms Can ‘stay Afloat’ For More Than 6 Months Without Federal Aid: Survey

Three-quarters of respondents who took part in a U.S. national survey said their firms can “stay afloat” for longer than six months without federal assistance even if the coronavirus pandemic severely affected economic activities in the country.

None of the respondents in the National Association for Business Economics (NABE) business conditions survey said their firms would fail in less than 5-6 weeks.

Forty-six percent of all respondents replied “no” to seeking federal assistance through the recently passed stimulus packages.

Thirty percent of respondents expect to resume normal business operations within 5-8 weeks, but nearly as many expect it will take 3-6 months.

Respondents from the goods-producing sector, however, are more bullish than those from other sectors.

Half of goods-producers suggesting that normal operations will resume in six weeks or less, compared to less than one-third of respondents from other sectors.

Sixteen percent of respondents indicate that normal operations would require longer than six months to resume their business.

More than half of respondents expect the official U.S. unemployment rate to be between 6 percent and 9.9 percent one year from now.

• Approximately one out of three respondents “somewhat” or “strongly” agree that the COVID-19 experience will lead to more geographically flexible hiring and working arrangements, such as more office locations, in the future.

To support small business owners economically affected by the coronavirus outbreak, President Donald Trump signed a legislation under which low-interest disaster loans will be disbursed to them.

The Department of the Treasury has delayed Tax Day until July 15, giving small business owners more time to pay their taxes without incurring interest or other penalties.

“The April 2020 NABE Business Conditions Survey represents a very different world than the one we inhabited during the last survey in January,” said NABE President Constance Hunter. “The outlook for inflation-adjusted gross domestic product (real GDP) in 2020 reversed sharply, with 86% of respondents expecting a contraction and only 14% predicting some positive growth,” according to Hunter, who is the chief economist of KPMG.

“Respondents report that last quarter was the worst since the global financial crisis for sales, profit margins, prices, and capital spending,” added NABE Business Conditions Survey Chair Megan Greene. “Compared to the outlook three months ago, respondents in the April survey report huge declines in the outlook for the next three months for each of these measures, as well as for wages and employment, added Greene, who is senior fellow at Harvard Kennedy School.

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