The COVID-19 pandemic and small business in Illinois: A preliminary comparison of neighboring states

The COVID-19 pandemic brought widespread health, social and economic hardship to households and businesses across Illinois, the nation, and the world. This report provides an initial look at some early evidence regarding one element of COVID-19 economic challenges by conducting comparative analysis of small business conditions in Illinois and in neighboring states. The analysis relies primarily on two data sources: The US Census Bureau Small Business Pulse (SBFS) surveys and Opportunity Insights economic tracker. More than 90% of Week 1 Illinois SBFS survey respondents said that the pandemic had a moderate or large negative effect on their business. This was similar to the national (U.S.) share but somewhat higher than other states in the region with the exception of Michigan. The share of respondents with such a negative response gradually declined over the next eight weeks in Illinois and nationally. The data from the SBFS survey, which reports small business’ self-assessment of the pandemic’s economic impact, suggests that the effect in Illinois has moderated somewhat over time and is quite similar to the impact nationally and among neighboring states. Opportunity Insights data is based on actual market transaction from a possibly non-random selection of private sector sources. Based on this data, Illinois’ Cook county its surrounding counties suffered a precipitous decline in the share of businesses that were open beginning in early March. Each of the counties recovered somewhat as time progressed, but all remained far below their January 2020 levels as late as March 2020. Indiana counties exhibited a similar pattern. We also examined Illinois border counties and find that in most cases they suffered consequences similar to their pair across state borders despite the somewhat different timing and strictures of state stay-at-home orders. We see similar patterns between Illinois and each of its neighboring states and there is little evidence that states’ stay-at-home orders were a significant predictor of the negative economic outcomes for small business.