Small businesses more hopeful as they reopen, but still cautious
At the onset of the COVID-19 pandemic this spring, the National Federation of Independent Business' Small Business Optimism Index suffered the worst one-month decline in its history.
Small business expectations are improving now, but New Jersey owners are monitoring the schedule of reopenings closely and hoping against any backslides.
In June, the index increased 6.2 points, with eight of 10 indicators trending upward.
"It's a very slow increase, but there is optimism on Main Street, so things are improving," Eileen Kean, NFIB New Jersey state director, said.
Even given that good news, Kean said a $9.9 billion borrowing plan announced by Gov. Phil Murphy, Assembly Speaker Craig Coughlin, and Senate President Steve Sweeney last week, and advanced by a Senate committee Tuesday, could lead to eventual tax hikes. And that might undo any progress that has been made since March.
"What does it mean if there's a sales tax increase? Whenever there's a sales tax increase, we see revenues declining. People shop less," Kean said.
The fact that New Jersey beaches have been able to stay open for the summer season so far is a positive, Kean added, because those beaches are part of the state's small business landscape.
But she said Murphy's picking and choosing of what can open and what must stay closed is leading even those beachgoers to feel a sense of fear about the future as they dig their toes into the sand.
"There's no consistency," Kean said. "NJ Transit is now moving to 100% capacity, but you can't go sit in a movie theater six feet apart, or even further apart?"
Still despite all the lingering uncertainty about the virus and its business impacts, the Small Business Optimism Index said the number of owners who feel now is a good time to expand, and those making job creation plans, both jumped 8% last month.
"For so many small businesses, expanding means hiring two more people, hiring four more people, not necessarily looking at huge numbers, but that's really important to New Jersey," Kean said.
Elements of New Jersey's reopening, like outdoor dining, have gone "really well," according to Kean, although restaurants are anxiously waiting for Murphy to give the green light to offering indoor service.
But if retail stores are forced to shutter again, Kean said the results could be disastrous for small businesses and the glimmer of hope they are clinging to right now.