COVID-19 impact ripples through local economy
Tourist-dependent Southwest Florida businesses report a hard hit wrought by the restrictions imposed due to the COVID-19 pandemic.
Ninety-one percent of businesses surveyed report at least some decline in business, according to survey results compiled by the Regional Economic Research Institute at Florida Gulf Coast University.
RERI conduced surveys with area businesses throughout Lee, Collier and Charlotte counties, beginning the last week of March and again the last week of April. The institute will continue to survey businesses through the last week of June before deciding whether to continue its monthly research.
In its release on May 12, notable statistics showed that 91 percent of businesses surveyed reported a decline in demand due to COVID-19, with 66 percent reporting a decrease of more than 50 percent. Forty-seven percent of respondents were in favor of opening the local economy within the next 16 days.
According to the report, “The Coronavirus Economic Impact Survey was designed to allow company executives to voice their concerns about the impact of the COVID-19 pandemic on their business. The initial survey began shortly after the coronavirus pandemic made its way to Southwest Florida, with the intention of establishing a benchmark to track overtime. A follow-up survey was then conducted in late April 2020 to obtain updated results to the six benchmark questions. This report compares the results from the latest survey to the benchmark survey conducted in late March 2020.”
The six benchmark questions centered around: consumer demand, sales revenue, temporary versus permanent effects, employees working from home, layoffs and reduced hours.
RERI also asked questions about loan programs, contingency plans, opening the local economy, concern about employees returning to work and Southwest Florida suppliers.
The team took information gathered at the beginning of its study and analyzed how that compared to the second round of questioning. Questions were designed to get a closer look into what, exactly, local businesses are dealing with.
“The first part of this plan established an initial survey of area businesses in order to create baseline economic conditions as soon as possible,” Westley wrote in the report. “The second part required follow-up surveys to track how his baseline changes over the months that follow. The third part utilizes some of the information from the surveys to conduct a more in-depth economic impact analysis that will apply either computable general equilibrium or standard input-output analysis.”
The analysis showed that sales revenue has substantially decreased due to coronavirus. Ninety-three percent of respondents claimed a decrease in sales revenue, 66 percent of those reporting a decline of more than 50 percent.
When it comes to employees, 36 percent of firms have more than 80 percent of their employees working from home. Fifty-two percent of firms have fewer than 20 percent of their employees working from home and 40 percent of small firms (25 or fewer employees) and 18 percent of large firms have more than 80 percent of their employees working from home.
Thousands of workers in the state have lost their jobs due to COVID-19. The report showed that 60 percent of respondents laid off fewer than 20 percent of their employees, though 24 percent of those surveyed had to lay off more than 80 percent of their staff.
There also has been a reduction in hours for those who have kept their jobs.
The study showed that 36 percent of respondents reduced hours for more than 80 percent of their employees.
So, how long do businesses expect the economic downturn to last?
According to the study, 61 percent of executives surveyed expect the adverse efforts of the coronavirus to be temporary, while 26 percent expect these effects to be permanent.
Half of the businesses surveyed had applied for the CARES loan and 34 percent applied for SBA loans that can provide relief for economic injury disaster.
“A third of the small firms and a quarter of the large firms responded that they did not apply for any loans at this time,” the study states.
When it comes to reopening the economy to a semblance of normality, about half of all small and large firms surveyed said the local economy should be “opened up” within the next 15 days.
Decisions were split right down the middle concerning timing, with 44 percent concerned about opening up too early, and 44 percent saying they were concerned that it was already too late.
“Of those who were concerned with opening too early, 34 percent preferred waiting 15 to 30 days, 30 percent were willing to wait another month or two and 9 percent were willing to wait more than 60 days,” the study states.
The report also showed anonymous concerns directly from those businesses surveyed.
“Aid is not coming fast enough,” one business owner wrote.
“The SBA loans should be for small businesses 2 to 500 employees. The news stories of large multi-billion dollar companies getting SBA loans is abhorrent,” another owner wrote.
These are real concerns for real business owners in our backyard.
“I have applied for EIDL and received nothing. I have applied four times for PPP and received nothing. I have applied for reemployment benefits and received nothing. I have received $1,200 in stimulus and I have a wife and two kids. A disaster on top of a disaster,” one business owner wrote in the “economic relief concerns” category.
Some showed distress with the state’s system for collecting unemployment benefits.
“My biggest issue is filing for Florida unemployment. We were told that self-employed, and 1099 workers could now apply, but the system says it doesn’t show any income from Florida, so I’ve been declined,” read an entry. “”The unemployment system is woefully outdated, and hasn’t been updated to even include this needed information. It’s so broken, that you can’t log in 90% of the time to even see your decision, let alone attempt to appeal it or include more information to reverse the ruling.”
One business owner was concerned about an influx of potential “tourists” to Florida, as this is a destination many get away to.
“I’m concerned with tourism picking up in spite of local restrictions and the lack of supplies available for me to safely reopen,” read the entry. “It is impossible to find sanitizer and cleaning products that would (make) it easier to do my job while allowing shoppers in my store. I would like to see the borders closed in areas with aging populations and low numbers so that we can open our shops safely to our small communities. Allowing tourists to flood in would bring dollars to our area, but at a very big cost.”
Other feel the pandemic has been politicized.
“I am concerned that inaccurate information has been disseminated about how serious the virus is for political purposes,” read one entry. “The current status was a major over reaction to the situation. Many people will not recover from the shuttering of the economy and will have to start over.”
There are numerous other entries representing concerns business owners are having to face in Southwest Florida.
“I am truly grateful to the help and support of Southwest Florida chambers, industry associations, and economic development organizations for promoting this survey to their network of businesses,” Westley said.
RERI is slated to collect its next round of information the last week of the month. It is unclear when the next release of information will be.