COVID-19 Anxiety and Uncertainty Dominate Chamber’s 2020 State of The Commerce Survey

The Southwestern Vermont Chamber of Commerce distributed its annual State of the Commerce survey to many of its members recently. The purpose of the State of the Commerce Survey is to hear from regional businesses and nonprofits about how they are doing in the current economy, what their current attitudes are in relation to economic vitality, and what new small business trends they see emerging.

“No surprise on this year’s survey, COVID-19 dominated the themes, feedback and trends of the report,” says Matt Harrington, executive director of the Chamber.  “Anxiety and uncertainty on the future of business and life in Southwestern Vermont are the most pressing issues for many of our small business owners and nonprofits according to this survey.”

The survey was distributed to 406 members of the regional chamber of commerce and 106 business owners and nonprofits completed it or 25% of the total chamber membership.  Data was collected in July and tabulated by the chamber.

The main industries represented in the survey based on who filled out the survey included retail at 25%, nonprofits at 17%, lodging at 14%, dining at 10%, and attractions at 8%. Additional sectors included education, health care, real estate, law, marketing, agriculture, energy, government and manufacturing.

When asked what the current operating status of their business or organization due to the COVID pandemic was, 41% of respondents indicated they were at 76-100% operating capacity, while 21% were at 26-50% operating capacity, 18% were at 51-75% operating capacity, 10% were at 25% operating capacity, and 9% indicated that they were temporarily and voluntarily closed.  One percent of respondents were still closed due to restrictions on their specific business or industry.

When asked what was impacting their business success most directly, the number one issue was "the COVID pandemic."  Number two was the "general business climate in the area," while number three was the "thin margins that impact profitability" and number four was "workforce issues."  This differed from the 2019 State of the Commerce Survey, which had "workforce issues" at number one, and "demographic challenges" at number three.

Interestingly, when asked when participants expected to get their organizations back to normal operating status, 28% indicated they didn’t know.  Fifteen percent suggested the second half of 2021, while 12% were hoping to be operating normally by the fourth quarter of this year.

“It’s concerning that a majority of the participants don’t even expect to be at normal operating status until late 2021.  Imagine a whole year from now before you’re operating like it's 2019.  This shows the hardship and difficult decisions many of our owners and operators are having to make.” Harrington stated.

When asked what measures participants have taken to reduce the negative effects of the pandemic they indicated employment reduction (40%), change of business model (31%), working time reduction (28%).  Twenty percent indicated they had not taken any measures.  Some of the comments from participants included: “created new protocols for staying safe,” “flexibility in employee work hours,” “curbside pickup and delivery,” “online options,”  “increased remote interactions with clients,” and “took on another job to cover expenses.”

Using a letter grade scale from A (good financial health) to F (poor financial health), participants were asked how they felt about their current financial health: 43% indicated As and Bs, 35% indicated Cs, and 22% indicated Ds and Fs.  “We ask this question each year and this year flipped from last year,” comments Harrington.  “Last year we had 70% of our businesses in the A and B category, 27% in the C category, and 3% in the D and F category.  You can see how reality has shifted in a mere twelve months with the global pandemic and how that impacts the health of our organizations.”

Sixty two percent of participants indicated that much of their current economic relief came from economic relief funds such as the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).  Interestingly, 22%, the second highest response showed that many organizations "did not need any additional financial assistance in the last twelve months.”  However, right below that, 21% of respondents indicated that they have used personal savings accounts such as IRAs, 401Ks and other savings to act as financial assistance for their businesses throughout the COVID pandemic.

Harrington added, “It’s heartbreaking to hear some of these stories where business owners have cashed in all their life savings just to keep their businesses running.  What’s worse is that those funds just got them through the last six months.  If owners and operators don’t expect to get back to normal until late 2021, how are they going to continue to fund these businesses after using all of their personal savings?”

One silver lining found in the survey results was around employees.  In the survey, 54% of business owners indicated that they have had no change in employee count due to COVID.  Another 25% of business owners indicated only a loss of 1-25% of their employee count since COVID.

Another silver lining was around conversion to online commerce. Twenty three percent of respondents indicated that they now do online business due to the COVID Pandemic, which they were not doing before COVID.

When participants were asked if they felt that Southwestern Vermont was a good place to do business, 87% of participants responded “yes” with only 13% indicating “no.” This was up from previous State of the Commerce surveys, which showed 84% indicating “yes” in 2019 and 81% indicating “yes” in 2018.  When asked if in the next three years would Southwestern Vermont be better or worse to have a business in, 74% indicated it would be better. This was slightly down from last year, which was at 80% indicating it would be better.

“I think the ‘is Southwestern Vermont a good place to do business” question and positive response is a mixture of resolve, grit and community support.  The resolve and grit of our business owners and non profits is really something remarkable,” Harrington commented.  “Additionally, I hope the positive answer on that question is a testimony to the work the state, local agencies, the chamber and this community have done to rally behind our small business owners.  There is still a lot of work to be done, but attitude can be a game changer.  Even in the midst of a global economic and health crisis, Southern Vermonters still think that tomorrow will be better.  It’s why people love to come to Vermont.  Vermonters know how to dig in and weather the storms.  If the survey is any indication of the attitude of Vermonters, we will weather this storm too.”