93% of small businesses fear recession, survey says
2,500 small business owners will meet at the 10,000 Small Businesses Summit in Washington D.C.
HOUSTON — In the heart of the Heights, Alli Jarrett’s restaurant – Harold’s on 19th Street – has been serving Southern food and Southern hospitality since 2013.
“Really good shrimp and grits, good burgers, salads,” she said.
She spent a year remodeling the 100-year-old building and pays homage to its former occupant, another small business – Harold’s in the Heights – which was around for over 60 years.
“It’s a thriving, wonderful neighborhood where you share sugar with your neighbors,” Jarrett said.
But even after surviving the pandemic, businesses like hers are now having to brace themselves for a possibility of a recession.
“It is looming, and I think the best thing we can do is try to work smart,” she said.
Among the issues she’s facing are hiring and supply chain issues.
According to a new survey from Goldman Sachs, 93% of small businesses “fear a coming recession.”
It’s why Jarrett and thousands of small business owners are headed to Washington D.C. this week to attend the 10,000 Small Businesses Summit – where they’ll get to meet government officials face-to-face – in the midst of so much uncertainty.
“Try to make change collectively with our voices so that we advocate for ourselves and for our staff members and for all the families that we feed,” Jarrett said.
John Diamond is the Director for Public Finance and Kelly Fellow in Public Finance at Rice’s Baker Institute and he said small businesses are facing a universal labor shortage on top of the other factors that make the fear of a recession real.
“We’re facing unprecedented levels of inflation, and the Fed is committed to getting that inflation under control … they’re going to do that by producing slack in the economy, by raising interest rates,” Diamond said.
And if a recession does in fact occur, making it through is even more challenging for small businesses.
“Lenders are unwilling to lend them the sums they need to make it through the recession yet they don’t have as many options to cut expenses as larger businesses,” Diamond said.
But they’re critical to the economy and he said often referred to as the engine for job growth.
“They’re going to make up about one-third of wages and one-third of employment so they are a significant share of the employment in the United States and that’s going to be even more true in Houston,” Diamond said.
It’s something Jarrett knows firsthand.
“That’s what small business is … is that we are job creators,” Jarrett said.
And as she keeps pushing, she does so for herself and the futures of her employees.
“It’s probably what my grandmother told me years and years ago is you just have to pull up your boots and not cry and keep moving forward,” Jarrett said.