The prolonged economic impacts of COVID-19 have been wearing on small and medium-sized businesses, as owners report more uncertainty about when and how they may recover, according to a new report from Principal Financial Group. 

Business owners responding to the Principal Financial Well-Being Index survey are more concerned and cautious about the economic outlook than respondents to the previous survey in September. The new report compares responses from businesses collected by Principal since last spring when the coronavirus pandemic began. 

The 10-minute online survey, conducted Nov. 13-22, polled 500 business leaders from U.S. companies, in five size categories starting at two to 19 employees and ranging up to 1,000 to 10,000 employees.

Just under half — 46% — of the businesses surveyed reported being fully operational, with about 1 in every 4 businesses saying they’re uncomfortable with their current cash flow situation. However, as they consider the next 12 months, 71% expect some level of improvement in their finances. Some attribute this cautious optimism to the vaccine and government support that may alleviate the situation. 

Amy Friedrich, president of U.S. Insurance Solutions with Principal, said that while the vaccine rollout will be a big help, there’s no quick and easy fix. 

“Small business relief programs should continue to support stability but certain sectors may need more support to see any 2021 growth,” she said in a statement. “Patience, creativity, and continued resilience will likely be key traits for businesses in what could be an uneven recovery year.” 

The most recent survey results highlight discrepancies between how U.S. rural and metro small and medium-sized businesses are being affected by the economic challenges of COVID-19. Less than a quarter of rural businesses reported being fully operational, compared with almost half of metro respondents. 

Additionally, one-third of rural businesses believe their local economy is declining, in comparison with 18% of metro businesses. And 61% of rural businesses feel unsupported or impartial to federal government policies or initiatives designed to help their businesses, compared with 36% of metro counterparts. 

During this last survey, top priorities of business owners included the health of their employees and themselves (42%), supporting employees emotionally and mentally during this time (32%), and paying employees’ salaries and benefits (29%).