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Mapped: The Uneven Recovery of U.S. Small Businesses

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Mapped: The Uneven Recovery of U.S. Small Businesses

Mapped: The Uneven Recovery of U.S. Small Businesses

Small businesses are the backbone of the U.S. economy, employing nearly half of the private sector workforce.

Unfortunately, lockdown and work-from-home measures brought about by COVID-19 have disproportionately affected small businesses – particularly in the leisure and hospitality sectors.

As metro-level data from Opportunity Insights points out, geography makes a great deal of difference in the proportion of U.S. small businesses that have flipped their open sign. While some cities are mostly back to business as usual, others are in a situation where the majority of small businesses are still shuttered.

The Big Picture

In the U.S. as a whole, data suggests that nearly a quarter of all small businesses remain closed. Of course, the situation on the ground differs from place to place. Here’s how cities around the country are doing, sorted by percentage of small businesses closed as of September 2020:

MetrosSmall Businesses ClosedSmall Businesses Closed (Leisure & Hosp.)
San Francisco-49%-65%
New Orleans-45%-72%
Honolulu-41%-39%
Washington DC-37%-55%
San Jose-35%-41%
Portland-34%-46%
San Antonio-34%-60%
Sacramento-33%-43%
Boston-33%-42%
Oakland-32%-52%
Austin-32%-65%
Bakersfield-31%-64%
Houston-30%-58%
Seattle-28%-47%
San Diego-28%-41%
Baltimore-28%-43%
Detroit-28%-44%
Los Angeles-27%-39%
Chicago-27%-37%
Tucson-27%-37%
Atlanta-26%-33%
Fresno-26%-50%
Oklahoma City-26%-56%
Cleveland-26%-39%
Denver-26%-56%
Indianapolis-25%-29%
Denver-25%-38%
El Paso-25%-34%
Philadelphia-24%-34%
Tulsa-23%-40%
Albuquerque-23%-42%
Colorado Springs-23%-37%
Louisville-23%-25%
Miami-23%-38%
Fort Worth-22%-34%
Las Vegas-22%-35%
Tampa-22%-45%
Milwaukee-22%-30%
New York City-21%-40%
Dallas-21%-38%
Memphis-21%-37%
Minneapolis-21%-36%
Nashville-21%-39%
Columbus-21%-35%
Phoenix-19%-36%
Jacksonville-18%-35%
Salt Lake City-18%-24%
Charlotte-18%-42%
Raleigh-16%-34%
Wichita-15%-29%
Kansas City-15%-24%
Omaha-13%-14%

New Orleans and the Bay Area are still experiencing rates of small business closures that are almost double the national median.

Small businesses in the leisure and hospitality sector have been particularly hard hit, with 37% reporting no transaction data.

Getting Back to Business

Some cities are seeing rates of small business operation that are nearing pre-pandemic levels.

Change in small businesses open by city - back to normal

Of the cities covered in the data set, Omaha had the highest rate of small businesses open.

Still Shuttered

In cities with a large technology sector, such as San Francisco and Austin, COVID-19 is shaking up the economic patterns as entire companies switched to remote working almost overnight. This is bad news for the constellation of restaurants and services that cater to those workers.

Change in small businesses open by city - still closed

Likewise, cities that have an economy built around serving visitors – Honolulu and New Orleans, for example – have seen a very high rate of small business closures as vacations and conferences have been paused indefinitely.

As the pandemic drags on, many of these temporary closures are looking to be permanent. Yelp recently reported that of the restaurants marked as closed on their platform, 61% are shut down permanently. As well, businesses in the retail and nightlife categories also saw more than half of closures become permanent.

In Remembrance of Revenue

A business being completely closed is a definitive measure, but it doesn’t tell the whole story. Even for businesses that remained open, revenue is often far below pre-pandemic rates.

small businesses revenue covid-19

Once again, businesses in the leisure and hospitality sector have been hit the hardest, with revenue falling by almost half since the beginning of 2020.

At present, it’s hard to predict when, or even if, economic activity will completely recover. Though travel and some level of in-office work will eventually ramp back up, the small business landscape will continue to face major upheaval in the meantime.

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Politics

The Start of De-Dollarization: China’s Gradual Move Away from the USD

The de-dollarization of China’s trade settlements has begun. What patterns do we see in USD and RMB use within China and globally?

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An area chart illustrating the de-dollarization of China’s trade settlements.

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The following content is sponsored by The Hinrich Foundation

The Start of De-Dollarization: China’s Move Away from the USD

Since 2010, the majority of China’s cross-border payments, like those of many countries, have been settled in U.S. dollars (USD). As of the first quarter of 2023, that’s no longer the case.

This graphic from the Hinrich Foundation, the second in a three-part series covering the future of trade, provides visual context to the growing use of the Chinese renminbi (RMB) in payments both domestically and globally.  

The De-Dollarization of China’s Cross-Border Transactions

This analysis uses Bloomberg data on the share of China’s payments and receipts in RMB, USD, and other currencies from 2010 to 2024. 

In the first few months of 2010, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. 

China has since closed that gap. In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.

DateRenminbiU.S. DollarOther
March 20100.3%84.3%15.4%
March 20114.8%81.3%13.9%
March 201211.5%77.1%11.5%
March 201318.1%72.7%9.2%
March 201426.6%64.8%8.6%
March 201529.0%61.9%9.0%
March 201623.6%66.7%9.7%
March 201717.6%72.5%9.9%
March 201823.2%67.4%9.4%
March 201926.2%65.1%8.7%
March 202039.3%54.4%6.3%
March 202141.7%52.6%5.6%
March 202242.1%53.3%4.7%
March 202348.4%46.7%4.9%
March 202452.9%42.8%4.3%

Source: Bloomberg (2024)

Since then, the de-dollarization in Chinese international settlements has continued.  

As of March 2024, over half (52.9%) of Chinese payments were settled in RMB while 42.8% were settled in USD. This is double the share from five years previous. According to Goldman Sachs, foreigners’ increased willingness to trade assets denominated in RMB significantly contributed to de-dollarization in favor of China’s currency. Also, early last year, Brazil and Argentina announced that they would begin allowing trade settlements in RMB. 

Most Popular Currencies in Foreign Exchange (FX) Transactions

Globally, analysis from the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.

Currency20132022Change (pp)
U.S. Dollar87.0%88.5%+1.5
Euro33.4%30.5%-2.9
Yen23.0%16.7%-6.3
Pound Sterling11.8%12.9%+1.1
Renminbi2.2%7.0%+4.8
Other42.6%44.4%+1.8
Total200.0%200.0%

Source: BIS Triennial Central Bank Survey (2022). Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.

The Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use. 

The Future of De-Dollarization

If the RMB’s global rise continues, the stranglehold of the USD on international trade could diminish over time.  

The impacts of declining dollar dominance are complex and uncertain, but they could range from the underperformance of U.S. financial assets to diminished power of Western sanctions.

However, though the prevalence of RMB in international payments could rise, a complete de-dollarization of the world economy in the near- or medium-term is unlikely. China’s strict capital controls that limit the availability of RMB outside the country, and the nation’s sputtering economic growth, are key reasons contributing to this.

The third piece in this series will explore Russia’s shifting trading patterns following its invasion of Ukraine.

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Visit the Hinrich Foundation to learn more about the future of geopolitical trade

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