The last 18 months have taken a toll on the United States business sector, but mom-and-pop shops on Main Street U.S.A. have emerged from the experience stronger than ever. Main Street’s small and mid-sized businesses (SMBs) recovered from the pandemic’s economic shock faster and are now outperforming other businesses. It took Main Street businesses less than a year of recovery to get back to where they were in Q1 2020, while the rest of the U.S. business sector is still not back to where it was before.
Main Street SMBs are not entirely out of the woods yet, however. Many are still understaffed, adjusting wages to find the right wage rate to attract the workers they need and keep current employees happy.
These are only a few key findings from PYMNTS’ new Main Street Merchant Index: How SMBs Are Faring In Their Recovery Efforts, September 2021 edition. We gathered data from the Bureau of Labor Statistics, examining key factors such as the number of workers these businesses employ, the wages they pay their workers and the size of their physical footprint to gauge their overall economic health. We use this data to calculate the Main Street Merchant Index (MSI) score — a quarterly metric that shows how Main Street’s economic health changes over time.
Our research shows that Main Street SMBs have not only regained the ground they lost to the pandemic but have pulled ahead of where they were before the outbreak — though this varies by region. SMBs on Main Streets in the South have endured the past 18 months exceptionally well, for example, while those on Main Streets in the Northeast have just recently managed to get back to zero.
Some industries have fared well during the past 18 months, with professional services firms leading the pack. Not only did professional firms see their MSI scores slip less than those in any other industry, but they are also the farthest ahead of where they were in Q1 2020. They are employing more workers and paying those workers 10 percent more than they did before the outbreak. Most other firms have had to increase wages to compensate for falling employment levels, by contrast.
This ongoing struggle to find the right balance between wages and employment levels is only one of the challenges Main Street SMBs face as they work to regain lost ground. The Main Street Merchant Index details what steps they are taking to boost their performance in this new economy.
To learn more about how the past 18 months have impacted Main Street SMBs, download the Index.
