Posted on 11/07/2022 10:02:35 AM PST by george76
Small businesses are struggling to pay rent due to higher rent inflation and fewer customers. The struggles vary by type of business.
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Record Surge in Small Business Delinquencies
Alignable reports Record Surge In Rent Delinquency: Up 7% In October, Totaling 37% For U.S. SMBs
Due to ongoing economic challenges, small business owners' ability to pay their full rent on time in October took a major hit based on a new Alignable poll. In fact, the U.S. rent delinquency rate among small businesses jumped 7% in just one month, marking the largest, most rapid increase in 2022.
In September, rent delinquency was at a six-month low, as optimism for Q4's earning potential was high and some small business owners reported increased sales.
But now, a month later, 37% of small business owners in the U.S. were unable to pay their rent in full and on time in October, compared to just 30% in September.
Poll Results
Higher rents for 51% of SMBs Cumulative, negative impact of more than a year of high inflation, which has absorbed most sales gains Recessionary fears Steeper-than-usual gas prices (rising yet again) Ongoing increases in supply chain costs Rising labor expenses and shortages Slowdown in consumer spending. The overall delinquency rate jumped to 37 percent in October from 30 percent in September and from 26 percent in December of 2021.
Manufacturers are doing OK, only up one percentage point since December of 2021.
Artists/Musicians are up from 10 percent in December of 2021 to 37 percent in October of 2022.
This is an interesting set of numbers, especially education. Have parents stopped sending their kids to daycare?
The only relevant article I could find is from February 24, 2022.
PEW reports Working Parents Face Continued Chaos Despite Reopened Schools
Federal data analyzed by Stateline shows that parents of small children have left the workforce in much higher numbers than other working adults during the pandemic.
In the last quarter of 2021, 6% fewer jobs were held by parents of children ages 5-12, both mothers and fathers, compared with the same period in 2019, while other prime-age workers were only 1% short of pre-pandemic job levels, according to a Stateline analysis of census numbers provided by ipums.org at the Institute for Social Research and Data Innovation at the University of Minnesota.
Parents, especially mothers, have lagged in returning to work, partly because of periodic school closures due to COVID-19 outbreaks.
“At the beginning of the pandemic, at least everybody was on the same page and realized we were all in this terrible thing together. Now it feels like parents are alone in this. We’re forgotten,” said William Scarborough, a University of North Texas assistant professor who has a 3-year-old son in a pre-K program that’s often canceled. Children under 5 years old cannot yet be vaccinated, making them more vulnerable to COVID-19.
Is it still a Covid issue or did that morph into a cost issue?
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Also note the surge in gyms and beauty salons.
Not to worry, citing jobs, president Biden says the economy is strong.
Lost in the Strong Jobs Meme, Full Time Employment is Down 572,000 Since May
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I suggest, Lost in the Strong Jobs Meme, Full Time Employment is Down 572,000 Since May
Others suggest that the decline in full time employment is noise.
So, I did a follow-up.
Please consider Is Full Time Employment a Trend or Noise? Let's Compare Today to the Great Recession
My conclusion remains the same. The decline isn't noise. It mirrors what happened in 2007.
People are struggling with inflation and a falloff in business activity. There's no doubt about that.
Elections have consequences. Trump had us on the right path, even with the economic hits from Covid.
This is insanity defined. Energy is the lifeblood of our economy. Period. Throttling energy crippled our economy and inflating our currency with pork spending and “green energy” crippled our buying power.
Buckle your seatbelt because this is going to become far worse before it gets better. Just a disaster from top to bottom with the cat 5 hurricane of entitlements looming on the horizon as well as interest payments on our astronomical debt.
I am not an economist, but I think it is very possible that we could slip into a depression. The consumer and business debt numbers are staggering, interest rates will crush the housing market, and lagging employment numbers always follow.
Stock markets are utterly dependent on Fed stimulus and easy money through low interest rate loans – The end of the American entrepreneur, end of innovation, end of the American dream.
https://freerepublic.com/focus/f-bloggers/4072014/posts
Along with their other problems ,small business has to deal with the scum from YELP...Watch the documentary,BILLION DOLLAR BULLY....Yelp has been destroying small businesses for over 10 years now....
“interest rates will crush the housing market”
In the UK, housing is sometimes sold by fractional share.
By say 50% of the house with a mortgage, rent the other half at say $100/month and get a (fixed price) option for the balance.
After interest rates fall to a trigger rate, exercise the option during a refinance.
I found this online:
https://wonderwebdevelopment.com/billion-dollar-bully-exposes-yelp-predatory-practices/
I have no knowledge of Yelp personally. Those persons who wish to deal with it should ask nearby businesspeople their views and experiences.
I chose restaurants by volume of business and asking people leaving the establishment.
Let’s go Brandon!!!
My fuel costs up over 100%
Aluminum up nearly 150%
I haven’t bought steel in a while but I’m sure it is up a lot.
Cutters, sawblades, welding wire, everything needed for a fabrication shop up in the 100% range. Even the software companies have raised their prices 25% to 30% And that’s just my business costs. Everyday living. Easily 100% higher than pre chomo Joe.
There have been a few real estate people pointing this out since the artificial covid boom ended this summer, only to be pooh pooed by kool aid drinkers, like Redfin, Zillow, etc.
Artificial housing prices went up 20 to even 40 percent, for no reason. During this time there was a moratorium on evictions and foreclosures, but those covid rules are going away during a bad economy. Signs showed this summer when late payments and delinquencies on mortgages rose. The next predictor in line was rent payments and here we are.
Gonna have to watch that.
Not to worry, citing jobs, president Biden says the economy is strong.
Tax money is coming in strong and fast.
It’s free on TUBI
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