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Small-business owners' confidence in the U.S. economy soured in March, ending a historic run and putting on hold plans for expansion and hiring as the coronavirus pandemic left few unscathed, according to the National Federation of Independent Business.
"The business impact of COVID-19 has shaken the small business sector," the small-business lobby said Tuesday, referring to the disease caused by the new coronavirus.
The economic disruption escalated in March as small businesses rapidly scaled back operations or closed their doors, NFIB said, adding that small-business owners are bracing for more.
The NFIB survey, a monthly snapshot of small businesses in the U.S., found that the optimism index fell in March to 96.4, an 8.1-point decline and the largest monthly decline in the survey's history.
Economists look to the report for a read on domestic demand and to extrapolate hiring and wage trends in the broader economy.
Most of the responses from small-business owners were collected in the first half of the month, the NFIB said, "so the sharp decline in employment is not reflected in the March survey data."
Nearly 10 million people filed applications for unemployment insurance during the two weeks through March 28.
The March survey results, based on responses from 627 small businesses, showed a sharp drop in key measures tracked by the NFIB, including the outlook on business conditions and sales expectations.
The survey results mirror those from the Conference Board and the University of Michigan, other key indicators economists use to gauge domestic consumer spending.
About half of respondents to a separate NFIB survey done in late March said that they could only survive by up to two months under the current business conditions and about one-third said they would remain open for three to six months.
"It is vital that these businesses have access to federal funds that are made available through the CARES Act to keep the doors open," NFIB Chief Economist William Dunkelberg said in a statement referring to the government's $2 trillion stimulus plan.
But business owners, the NFIB said, are finding it difficult to secure assistance from the two cornerstone programs to help businesses: the paycheck protection program and the economic disaster loan program.