Paychex Poll Reveals the Government Shutdown Negatively Impacted Business Outlook for Nearly One in Five Business Owners
Congress and President Trump reached a temporary deal on Friday, January 25, to end the month-long government shutdown, but the country faces lingering uncertainty about the economic implications of this extended budgetary standoff. Paychex, Inc., a leading provider of integrated human capital management solutions for payroll, benefits, human resources, and insurance services, surveyed 300 business owners with 100 employees or less from January 22-24, asking how the shutdown impacted their overall business outlook, as well as if and how their business was affected by the government shutdown.
How did the shutdown impact business sentiment?
According to the research, 19 percent of business owners said the shutdown had a negative impact on their business outlook. Despite the length of the shutdown, the future outlook for the majority (68 percent) of business owners was unaffected. Meanwhile, 13 percent reported that the shutdown had a positive impact on their business outlook.
How many businesses were impacted by the shutdown?
The Paychex survey found that 21 percent of business owners were directly impacted by the shutdown. The remaining 79 percent were not impacted. Of those experiencing the effects, the decrease in federal worker customers had the largest impact (41 percent), followed by:
- Payment delay from government contractors whose services their businesses rely upon (33 percent)
- Inability to apply for a Small Business Administration (SBA) loan (29 percent)
- Awaiting approval on an SBA loan application submitted before the shutdown (24 percent)
- Suspension of data services regularly provided by the federal government (22 percent)
- Inability to access E-Verify (17 percent)
“We’re encouraged from an economic standpoint to see that the government shutdown did not impede business sentiment for many, and most of the owners we surveyed were able to conduct business as usual,” said Martin Mucci, Paychex president and CEO. “Though many businesses weren’t affected, we know that some are still facing significant challenges due to the shutdown. Our advice is to stay informed by talking to financial advisors and other trusted business partners about how to manage cash flow disruptions and preparing for a second shutdown if the temporary resolution runs out on February 15 without a permanent agreement in place.”
For Drew Boling, owner of Custom Vehicle Upfitters, which sells and installs emergency vehicle equipment to government agencies, the shutdown impacted his bottom line.
“We have clients that have received their products and services but could not pay for them during the shutdown,” said Boling. “We were also not getting any new business from affected agencies. In addition, we are in the process of buying a new building, and part of the purchase will be funded through an SBA loan. We have been told that this loan could take twice as long as normal because of the shutdown.”
About the Survey
Paychex polled 300 randomly selected business owners with 100 employees or less. The survey was administered by Bredin, a third-party research firm, between January 22, 2019 and January 24, 2019 and yielded a +/- 5.66% margin of error.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, benefits, human resources, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 45 years of industry expertise, Paychex serves over 650,000 payroll clients as of May 31, 2018, across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.