Results are in for SBJ Publishing Inc.’s second round of the 2020 Economic Growth Survey, and the response rate was the best so far.
Nearly 700 business leaders participated in the follow-up survey, which was conducted in April to gauge the business landscape amid the coronavirus pandemic. H2R Market Research conducted both surveys; the first was in late February, before businesses were restricted under state and local stay-at-home orders.
Respondents varied in their business response to COVID-19, but 98% agreed they were concerned about the pandemic’s impact to the local economy and that their business had been adversely affected.
For instance, the average business leader expected their company revenue to fall by 31% between April and June, according to survey results. Before the pandemic took hold, leaders anticipated their business sectors would improve by roughly 12%, but as of April, respondents were anticipating their sectors to perform 18% worse this year than in 2019. “I’d been stunned if it came back any other way,” said Jerry Henry, CEO of H2R Market Research. “The intent was to get a moment-in-time snapshot. … I think it is grim, but I’m hoping actual expectations look a little better next time.”
Springfield Business Journal Publisher Jennifer Jackson said she recognizes business situations are constantly changing, which is why she’s planning to continue community conversations throughout the year. The first conversation was slated for May 29 in SBJ’s Economic Growth Survey kickoff via webcast.
“The real value in the data is the conversation that surrounds it,” said Jackson. “We saw that last year, and I am excited about our initial decision to release data right away and to continue conversations over the course of the year, … so that as things change and we identify opportunities and threats, we’ll be regrouping and taking steps together.”
For instance, the workforce outlook was brimming in this year’s first survey, as half of respondents planned to hire in 2020. Now, results show only 20% of respondents are in hiring mode. Other highlights from the second survey: Half of area businesses applied for a federal Paycheck Protection Program loan, 68% instituted work-from-home policies and 25% reduced employee hours to conserve resources.
The annual survey’s purpose is to garner business executives and managers’ insights into capital, staffing, office space and workforce trends, as well as identify and measure business confidence, according to past SBJ reporting. SBJ launched the annual Economic Growth Survey last year and results feed into forums for education and discussion.
Henry said he was surprised by the response rate of the latest survey but said business recovery in the community is a conversation that requires many voices. “This is a moment in history where experience doesn’t help a whole lot, so we need the context from other people. This study provides that,” said Henry.
Business leaders were asked in the survey to pinpoint various ways they were impacted by COVID-19, such as through revenues, finances, employee count and their outlook for the remainder of the year.
Of the current business activities expected to stick, respondents agreed that online videoconferencing is likely to remain popular after the coronavirus threat subsides. Only 7% of respondents anticipated they would do less videoconferencing post-COVID-19.
Likewise, the survey found 37% of business leaders anticipate allowing their employees to work from home more, on top of the 43% of respondents that already allow telecommuting.
Gary Rogers, owner of Springfield-based business brokerage firm The Kingsley Group, said he’s hearing similar intentions from his clients. The firm typically carries 40 business listings at a time, and Rogers said he’s starting to see some business activity resume.
“Our activity is already starting to pick up. We’re seeing communications with small-business owners to sell and buy,” Rogers said. “Our businesses are in a better cash-flow position … because we didn’t shut down as hard in the Midwest as they did on the coasts.”
Survey results show Springfield businesses generally have enough cash on hand to last 12 weeks from when they submitted their responses. Nationwide, businesses generally have enough cash on hand to last 27 days, according to JPMorgan Chase. Rogers said the effect on the economy likely won’t be experienced untilrecovery begins later this summer.
Confidence in the local economy has dropped dramatically. The Springfield Business Confidence Index computed by H2R Market Research was 142.8 in February, slightly behind SBJ’s inaugural index last year. Amid the pandemic, the local BCI is 81.7, according to the survey results.Jackson said she was surprised by how respondents tended to be more pessimistic about the outlook of industries outside of their own.
“I don’t think everybody will come out of this unscathed. We’re seeing a lot of retail and restaurant closures that has an impact down the line for those who aren’t feeling it as hard right now,” she said. “I do think the vast majority of our respondents think things must be a lot worse for everybody else. That’s why I think community conversations will lead to quicker healing.”
Henry said potentially surveying business leaders again in the coming months is all part of the process to adapt in business.
“Early in this, every half day, things were changing so much that it was different. Every week, our perceptions are still beginning to shift, so I expect the outlook to evolve more,” said Henry. “We’re all recognizing that we’re going to plow forward and get through this, but it’s important to see how it evolves over time.”
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