COVID-19 affected every business, but the effects varied by sector, firm size, and geography. In some sectors, like Leisure and Hospitality, businesses were hit hard and have yet to fully recover. The pandemic also hurt states that rely heavily on tourism. The Transportation and Warehousing sector, however, recovered quickly. The smallest American businesses created nearly a million jobs in the first year of COVID-19, while other businesses shed over six million jobs. Business applications increased significantly in mid-2020, and record-high levels persist in late 2022. The Retail sector (especially Nonstore) contributed the most, but applications grew across sectors. Preliminary results suggest that small businesses helped soften the economic blow of COVID-19, and they may have helped the economy innovate and adapt. Further research on the relationships between performance, business applications, startup rates, and job quits during COVID-19 could shed light on the importance of small businesses in combating and recovering from economic crises.
For more, read Issue Brief No. 17 – Business Dynamics During The COVID-19 Pandemic, which provides new insights into economic performance and trends during COVID-19.