WASHINGTON: US businesses hit by the coronavirus are reporting declines in sales and investment for the first time since the 2008 global financial crisis, according to a survey released on Monday.
And it is uncertain when conditions will improve, with about 30% of respondents saying it will take as long as three to six months, while others expected improvement in five to eight weeks, the National Association for Business Economics (NABE) found in its quarterly survey.
“Respondents report that last quarter was the worst since the global financial crisis for sales, profit margins, prices, and capital spending,” the survey’s chair Megan Greene said.
The report was the latest indication of the headwinds to the American economy caused by the pandemic, which has slammed major industries, undermining economic growth, while causing about 26 million people to file new claims for jobless benefits since mid-March.
The NABE survey of 107 business economists from all industries, showed 86% of respondents expecting economic growth to contract this year, while three-quarters said their near-term outlook was worse this month than in March.
For the first time since the global financial crisis beginning in 2007, the survey reported the majority of firms seeing sales decrease rather than increase over the previous three months. A similar number expected declines in capital spending expectations.
About a third of respondents in the survey conducted April 13-16, said their firms were “severely impacted” by the pandemic lockdowns, though only 2% had stopped operations entirely, NABE said.
Hiring freezes were widespread: 63% had them in place, with 34% of businesses shutting down operations in whole or in part, 31% furloughing their employees and 17% laying workers off.
The US Congress has enacted nearly $3 trillion in aid measure to bolster the economy against the pandemic and the lockdowns imposed to stop the spread of the virus, which includes provisions for hundreds of billions of dollars in loans and grants to businesses struggling to survive.
NABE reported nearly half of respondents would not take advantage of the money, with firms that were unsure coming in second.