1 In 6 Arizona Small Businesses Were Closed In February: Facebook

ARIZONA — Roughly one out of every six small businesses in Arizona have closed their doors for good since the start of the COVID-19 pandemic.

That grim finding is the tip of the iceberg, when it comes to the impact that the virus-induced economic slowdown has had on the Grand Canyon State's economy.

Roughly half of the small businesses in Arizona reported lower sales over the past calendar year, while 19 percent of those businesses also said they reduced employment during that time frame.

These are among the findings included in the latest Global State of Small Business report, compiled through research conducted by social media giant Facebook.

This year’s report highlights the immense toll the pandemic has taken on small businesses, especially those owned by women and people of color.

This report surveyed 35,000 small businesses across 27 countries and territories in February 2021. Facebook partnered with the Small Business Roundtable to compile its U.S. data.

Nationwide, nearly 1 in 5 small businesses — or 22 percent — reported they were closed in February 2021, an increase from 14 percent in October 2020. In this case, a closure was defined as a business that was “non-operational” or not generating any revenue. The report did not distinguish whether the closures were permanent or temporary.

Compounding the closures, just over half of U.S. small business owners reported a drop in sales in January 2021 compared with January 2020.

Here are some other nationwide findings highlighted in the report:

• Just over half of those surveyed were confident in their ability to continue operating for at least six months if the pandemic and current conditions persist. A similar proportion said they didn’t plan to rehire laid-off or furloughed employees in that time, either.

• Perhaps unsurprisingly, a greater number of women-owned businesses in the United States reported a drop in sales this year — 54 percent compared with 47 percent of men-led small businesses.

• More than half of U.S. minority-led businesses reported a drop in sales compared with the previous years — 6 percentage points higher than other small businesses.

• Almost two-thirds of Black-led businesses and 46 percent of Hispanic-led ones reported a more than 50 percent drop in sales.

In Arizona, the numbers for small businesses are slightly better than the national averages, with closures ranking 5 percentage points lower than the national number.

The number of small businesses reporting lower sales (50 percent) was roughly even with the national average (51 percent). The percent of small businesses in Arizona that reported reduced employment (19 percent) was further below the national average (27 percent).

The most small-business closures were reported in New York (31 percent), Pennsylvania (31 percent), and Massachusetts (30 percent.)

By contrast, the fewest closures were reported in Maine (9 percent), Idaho (9 percent), and Colorado (10 percent).

Sheryl Sandberg, chief operating officer at Facebook, said in a statement the report is a “timely reminder” that many small businesses are “still vulnerable and in need of support.”

“And those feeling the impact of the pandemic the most are female and minority-owned businesses — a further reminder that whenever crises hit, it’s the most vulnerable who are always hit the hardest,” Sandberg said.

Read the full Global State of Small Business report online.