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For the first two years of the COVID-19 pandemic, the U.S. Census Bureau measured the pandemic’s impact on the nation’s small businesses through the Small Business Pulse Survey, which was conducted weekly during eight two-month phases. Minnesota Compass used this data to track economic impacts on our own small business community.

The survey was discontinued in April 2022, and Minnesota Compass has retired this indicator, but we wanted to leave readers with a few final insights from the data that we analyzed.

About 2 in 3 Minnesota small businesses were negatively impacted by the pandemic

In April 2022, 67% of Minnesota small businesses reported at least a moderate negative impact from the COVID-19 pandemic, with 17% reporting a large negative impact. Those shares are much lower than in May 2020, when 89% of small businesses reported at least some negative impact and 43% reported a large negative impact. That change is likely some combination of economic recovery and federal assistance improving owners’ assessments, and of some of the hardest-hit small businesses closing and therefore no longer participating in the survey.

Although there was variation from week to week, Minnesota generally had a smaller share of businesses reporting a large negative impact from the pandemic compared to the U.S. as a whole. States with heavily tourism-dependent economies, like Nevada and Hawaii, and states with stricter lockdown measures, like New York and California, often reported the most negative impacts.

Most Minnesota small businesses received some federal assistance

About 4 in 5 Minnesota small businesses reported receiving federal assistance. The Paycheck Protection Program (PPP) was by far the most common type of assistance received. The PPP provided small businesses with funds to pay up to eight weeks of payroll costs and to pay interest on mortgages, rent, and utilities.

2 in 5 Minnesota small businesses were back to normal in April 2022

By April 2022, 40% of Minnesota small businesses reported that they had either returned to their normal level of operations (19%) or had not been impacted by the pandemic (20%). However, 9% of owners surveyed thought that their business would never return to a normal level of operations.

Small businesses have been impacted by workforce and supply chain challenges

Even after lockdowns and major waves of severe illness were over, the economic repercussions of the pandemic continued to be felt in Minnesota’s small business community. As of January 2022, more than 1 in 4 Minnesota small businesses reported having at least a moderate decrease in the number of people they employed compared to before the pandemic.

From fall 2021 to spring 2022, about a third of small businesses consistently reported struggling to hire paid employees.

More than half of small businesses reported problems with their supply chain as well, particularly domestic supplier delays. As of April 2022, about 2 in 5 Minnesota small businesses reported that availability of supplies and inputs was affecting their work.

After the initial economic shock of the COVID-19 pandemic, we have seen Minnesota’s small businesses successfully build back, partly with assistance from federal grants and loans. However, our small business community continues to feel the impact of larger economic trends of inflation, supply chain disruptions, and workforce changes. Although the suspension of the U.S. Census Bureau’s Small Business Pulse Survey gives us one fewer tool to track impacts on small businesses, Minnesota leaders and policymakers will need to continue to pay close attention to this important sector so that small businesses can continue to drive economic growth and innovation.