More Than Half Of Business Closures Are Permanent
By Mish Shedlock of MishTalk
Thursday, July 23, 2020 12:39 AM EDT
(Click on image to enlarge)
A Yelp study finds that 55% of business closures are closed for good.
Yelp reports Increased Consumer Interest in May correlates with more Covid outbreaks and closures in June and July. Consumer Interest vs Outbreaks (Click on image to enlarge) Business Closures Fluctuate Across the Nation
There were 140,000 total businesses closures on Yelp from March 1 to June 15. This increased to more than 147,000 total business closures on June 29 and then dropped again to just more than 132,500 total business closures as of July 10.
In April, there were more than 175,000 business closures indicating that only 24% of businesses that were closed in April have reopened.
Even as total closures fall, permanent closures increase with 72,842 businesses permanently closed, out of the 132,580 total closed businesses, an increase of 15,742 permanent closures since June 15.
This also means that the percentage of permanent to temporary business closures is rising, with permanent closures now accounting for 55% of all closed businesses since March 1, an increase of 14% from June when we reported 41% of closures as permanent.
Overall, permanent closures have steadily increased since the peak of the pandemic with minor spikes in March, followed by May and June.
Total Businesses Closures (Click on image to enlarge)
States with the largest populations have the most closures. Total Business Closures Per 1,000 (Click on image to enlarge)
On a metro level, Las Vegas, NV, is suffering from the highest rate of permanently closed businesses with 861 businesses permanently closed, as the city reacts to a decrease in tourism. Meanwhile, Los Angeles, CA, has the most closures with 11,342 total temporary and permanent business closures. Restaurants Struggle (Click on image to enlarge) Conclusion
Permanent closures will continue to rise. Many small businesses already on the ropes, will not survive the reopening reversal.
Don't confuse the stock market with the real economy.
This is a deflationary event.
