Originally published on April 19 in the San Diego Business Journal, this excerpt is from the latest of EDC President and CEO Mark Cafferty’s weekly columns:
As we all settle in to the unfamiliar business and personal routines that have filled our days over the last several weeks, there is a lot of talk about “reopening” the economy. At the Chamber & EDC, our time is still being spent in daylong conversations with businesses—large and small—who are still in survival mode, trying to get money in the bank from various federal programs to help them keep their doors open, keep their team members employed, and bridge a gap from now until whenever some level of normalcy returns to their lives. If economic recovery was as simple as reopening something, we all would have (re)opened it by now.
The level of thoughtfulness, informed critical thinking, and step-by-step collaboration with public health officials that will need to go into the decision-making processes in front of us will be like nothing we have ever been a part of. Reopening businesses and generating near-term and long-term economic redevelopment strategies will be difficult and complex, and the level of urgency surrounding all of this could not be higher.
However, the unprecedented collaboration that is currently going into communicating with our political and healthcare leaders, sharing data and information across business groups and associations, and providing direct services to thousands of impacted businesses will position us well to generate the plans, steps, processes and communications strategies that will guide our businesses and economy into long-term recovery. This work and these relationships must ensure that as we work our way through this recovery, we create an economy that is more resilient and that works for more of our residents.
In the weeks ahead, we will share information on new task forces and working groups that will help in this ongoing and fluid process. Much of that work will be based on the information we have gathered from our ongoing business surveys with our partners, which we have shared with you below.
COVID-19 Impact Survey
Revenue impacts continue, but most firms favor temporary shutdowns over permanent closures.
In order to assess immediate economic impacts and understand the evolving business sentiment surrounding COVID-19, San Diego Regional Chamber of Commerce and San Diego Regional EDC, in partnership with San Diego and Imperial Small Business Development Center, Downtown San Diego Partnership and National City Chamber of Commerce, developed a survey.
Three trends stood out based on what employers told us during the first four weeks of surveying. These findings are based on responses from 692 companies across the San Diego region.
Temporary Shutdowns Increasing
Only about 1% of survey respondents have permanently closed their business, but 42% have temporarily shut down operations. This is encouraging, since the number of local business closures could have a direct bearing on the pace of recovery once the COVID crisis subsides. Businesses that have permanently closed their doors are in a range of industries, including biotech and pharmaceuticals, cleantech, food and beverage, manufacturing, professional services, and retail.
Expect Revenue Impacts to Continue
The industries in San Diego most vulnerable to the effects of policies aimed at containing the spread of the virus include arts and entertainment, food and beverage, retail, and tourism. Compared to when the survey began in mid-March, more firms in these industries increasingly expect revenue impacts to occur over the next 1-3 months, rather than immediately. The perception by business owners that the economic and financial pain of the crisis could last longer than initially expected will likely be reflected as an effective moratorium on business investment and hiring in the near term.
Financial Assistance and Access to Capital
Compared to earlier survey results, more businesses are expressing interest in financing and capital to cope with the massive revenue shortfalls associated with COVID-19.
For an interactive visualization of survey responses, please visit: https://www.sandiegobusiness.org/research/covid-19-survey-results/