Nevada State Bank small business survey reveals cautious optimism (sponsored)

Rick Thomas is Executive Vice President and Northern Nevada Executive at Nevada State Bank.

Rick Thomas is Executive Vice President and Northern Nevada Executive at Nevada State Bank. Courtesy Photo

As we enter what we hope will be the final phases of the pandemic, Nevada small business owners are approaching the summer months with a mixture of pensiveness and optimism. That’s the main takeaway from a recent Nevada State Bank survey of small business owners and managers across the region.

We’ve done this survey for the past eight years, but this year is certainly different from most. Since our inaugural survey in 2014, the overwhelming feeling among respondents was a sense of unbridled optimism about Nevada’s economic outlook. This optimism was supported by the numbers during the last decade, when Nevada’s GDP increased by more than 23 percent, rising from $144 billion in 2010 to more than $178 billion in 2019.

Then, COVID-19 hit, shaking Nevada businesses from Reno to Las Vegas, and all points in between.

Our annual survey revealed that the pandemic’s seismic impact is still very much in evidence today, but there’s hope on the horizon. While for the first time in eight years the economy was the primary concern of our survey respondents, nearly half of those respondents feel Nevada’s business environment will improve in the coming year. It may not be as optimistic as 2020’s 61 percent who expected an improving business environment, but it’s markedly similar to business environment expectations in 2019 at 48.8 percent. Let’s dig a bit deeper into some of the numbers.

Government regulations and healthcare costs are still top concerns

Concerns over government regulations and healthcare costs have always been top factors in our survey results, and this year is no different. Forty six percent of respondents are “very concerned” about regulations, while slightly more than 38 percent are “very concerned” about healthcare costs.

But, while these issues are still very important, even these concerns took a backseat to the desire for a functioning economy.

PPP loans continued to be a lifeline for businesses

It’s no wonder that businesses remain skittish after weathering the past year. Our survey revealed that the Nevada small business market was profoundly affected by the pandemic, with more than 70 percent of respondents having applied for a Paycheck Protection Program (PPP) loan.

Fortunately, 94 percent of those who applied successfully received their loans. We are proud to have been a part of the effort to keep businesses open and operating. Nevada State Bank approved more than $860 million to Nevada’s small businesses through PPP lending in 2020 and 2021.

Employment took a hit but is expected to rise

Nearly one in three respondents decreased their staff over the last 12 months. However, 58 percent stated their workforce remained the same from the previous year, and 30 percent expect it to increase this year. In fact, recent unemployment numbers show that businesses nationally have added jobs for four straight months.

But those who are planning on hiring are also concerned about attracting job candidates. Indeed, respondents feel recruiting will become even more difficult as the job market picks up, with 73 percent of survey respondents indicating it was “somewhat to very difficult” to recruit quality applicants from within the market, while 39 percent said it was “very difficult.”

Housing affordability may impact businesses’ abilities to attract employees. Higher home prices could deter people from moving into the market or cause some to move away, and Nevada’s housing market has been hot despite the pandemic.

As such, 29 percent of respondents are “very concerned” about housing affordability and 50 percent of respondents believe that interest rates will rise over the next year, further impacting housing affordability.

Recovery is in sight

Local business owners and managers estimate it will take about three years for the U.S. economy to make its way back to pre-pandemic levels. Fortunately, they’re a bit more optimistic about their own futures: Most of our survey respondents feel their businesses will return to “normal” within only 1.8 years.

At the point in time when this survey was taken, business owners were feeling very pensive, but cautiously optimistic. The vaccine was just rolling out; political offices were changing; and the demand for quarantine release was tangible in every new meme and tweet across social media.

The good news is that Nevada small business owners and managers appear to be confident that we are finally on the path to a brighter economic environment. It will take some time. But, like the pioneers who built our state, local businesses will forge their way toward a better future for all Nevadans.

To see the complete survey results, download the Nevada State Bank 2021 Small Business Survey report at www.nevadasmallbusiness.com.

Rick Thomas serves as Executive Vice President and Northern Nevada Executive at Nevada State Bank, leading a team that specializes in meeting the financial needs of businesses in the Northern Nevada market. Nevada State Bank provided and paid for this article.


Use the comment form below to begin a discussion about this content.

Sign in to comment