September 26, 2020
South Carolina Small Business Chamber of Commerce (SCSBCC) has compiled data showing a decline in new business license applications in numerous municipalities and counties in South Carolina. The data shows a worrisome trend in the health of the economy, namely that new business development has declined significantly in many parts of the state if not state-wide. New business licenses declined by 946 in the same months in 2020 as compared to 2019. If these results reflect similar experience in other states, the implication for economic recovery from the recession is severe.
There are 9 counties in South Carolina that require a business license. These counties were contacted to solicit data on new business license applications. For the other 37 counties, the largest municipality in each was contacted with a request for the same data
The data requested was the number of new business license applications received each month from April through July in 2019 and 2020
Only four counties and 13 municipalities provided usable information for the analysis.
All the counties providing data showed a significant decline in new business applications.
Together these counties had 845 fewer new business license applications from 2019 to 2020, a drop of 40.6% (see table below).
While the data from the municipalities was not as consistent, 9 of the 13 saw a decline in new business license applications ranging from 15.1% to 66.7% fewer applications from 2019 to 2020. Four of the municipalities showed increases in the number of new business license applications ranging from 3 to 11 new applications year over year. However, for all municipalities providing usable data there was an overall 10.6% drop in new business license applications from 2019 to 2020.
In the aggregate, for all counties and municipalities providing usable data there were 946 fewer new business license applications from April through July in 2020 compared to the same months in 2019, a 31.2% decline.
The Covid-19 recession has had a serious impact on new business license applications in South Carolina counties and municipalities for which usable data was collected. Overall, these counties and municipalities have seen a 31.2% decrease in applications from April through July in 2019 compared to the same months in 2020.
There is great national concern about the loss of small businesses resulting from the current recession. This analysis indicates that economy of South Carolina, and likely the nation, is being negatively impacted by both the loss of existing businesses as well as a significant reduction in new businesses.
Today the United States is at a 40-year low in new business startups—a statistic that has many concerned since economists tell us that most net new jobs come from businesses less than 5 years old with four or fewer employees. Since small businesses led the country out of the Great Recession by being the first to start hiring, this one-two punch to small businesses and entrepreneurs will certainly not bode well for the nation to recover quickly from this recession.