U.S. businesses expect a "very large and very negative impact" from the coronavirus pandemic and efforts to slow its spread, according to a survey published on Monday by the Atlanta Federal Reserve Bank.
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Quarter-ahead sales growth forecasts fell to below zero, from 5 percent last quarter, the Small Business Uncertainty survey showed, "the starkest swing" from one quarter to the next in the survey's six-year history, the Atlanta Fed said.
Two-thirds of those responding in the first week of the March 9-20 survey expected on average a 9 percent decline in sales from the virus. In the second week 85 percent of respondents expected an average 16% decline in sales.
"We are still months away from confidently gauging COVID-19's impact on output growth," Atlanta Fed economists wrote in a blog on the survey's findings. But the survey "indicates that firms are bracing for a huge negative impact on their businesses."
Interestingly, the firms surveyed did not signal much change to employment or capital spending plans for 12 months ahead. Perhaps, the economists wrote, they see the virus' impact "as sharp but short-lived, with little impact on longer-term employment and plans for capital expenditure."
The drop in sales forecast by firms may be too optimistic, the Atlanta Fed economists wrote, as governments respond with stricter limits on travel and business operations.
The survey covers all regions of the United States, every industry sector except agriculture and government, and firms of all sizes.