The unique nature of the COVID-19 crisis poses a new set of challenges for US small businesses as they claw their way toward recovery. Many face muted demand, new customer expectations, and operational challenges because of health and safety restrictions. Recovery will take time. After the 2008 recession, larger companies recovered to their precrisis contribution to GDP in an average of four years, while smaller ones took an average of six. How long it takes in the current recession will depend on both economic vulnerability to the COVID-19 response and the prevailing macroeconomic outlook in their respective industries.
Across all businesses, that could take five years or longer under two scenarios that McKinsey Global Institute and Oxford Economics have modeled and that more than half of global executives surveyed see as the most likely to unfold (Exhibit 1). Among small businesses, recovery is again likely to take even longer. Many may never reopen.