The social and economic impacts of COVID-19 are profound and sobering. Nearly every industry, company size and geography has been affected. Few communities and organizations have been spared. On March 16, Gov. Gary Herbert created the Utah Economic Response Task Force to identify the impact of the virus on businesses and to determine possible solutions for recovery.
Knowledge can best be found through primary research on a topic. With this in mind, we deployed the capabilities of a member of the task force, the Economic Development Corporation of Utah, to study business impacts and responses to COVID-19.
On March 18, task force partners sent a survey to Utah businesses. More than 1,200 organizations in 26 of 29 counties responded to share their stories. We are grateful for their experience on the front lines of this pandemic. It is the task force’s belief that data-driven decisions will help us regain our economic footing more quickly and effectively.
We learned from the survey responses that small companies described having to let most or all employees go. Hotel and leisure industries are seeing record-breaking declines in occupancy and visitation. Restaurants and bars are adapting or closing due to social distancing, and other hard-hit industries include dental and doctor offices, education, travel and real estate.
The impact on manufacturers and suppliers has caused challenges for nearly every industry. Revenue impact is expected to be severe, lasting six months or more. Disruption ranged from lost revenue, acquiring inputs, providing a safe environment for employees, managing virtual work, and most critically, a drop in product or service demand.
The key findings businesses noted were that nearly 60% of companies were experiencing an ‘extremely negative’ impact. A majority of businesses cite falling demand with two-thirds of companies reducing capital expenditure due to uncertainty. On a positive note, almost half of all businesses have savings to operate on with 20% indicating they need no financial assistance.
While Utah businesses may be better positioned to weather this pandemic, the need and pain acute are real. Companies are asking for help through tax deferrals, credits, delayed foreclosures, flexible repayment options and low-interest loans.
An Unexpected Outcome
Many of the companies being disrupted are finding new opportunities. Innovative communication, planning for the future, and the chance to think and grow creatively are among myriad ways they are moving forward during the downturn. Adaptive companies are modifying employee benefits, product offerings, and even business models to accommodate customers and keep their doors open.
Some organizations are taking a community-facing philanthropic approach such as donating proceeds from product sales and turning over personal protective equipment, or PPE. Employee-facing, customer-facing and business operation innovations are the order of the day as Utahns adapt, innovate and overcome.
Policymakers are already putting in place approaches identified by the survey, including low- or no-interest loans or grants for operating capital. Bridge lending, just announced by the Governor’s Office of Economic Development, is one example. Any recovery will take a public-private effort. Survey respondents shared ideas Utah businesses should consider implementing. These include:
- Providing flexible repayment options on loans and billings, including delaying foreclosures.
- Offering assistance, donations, equipment and other resources to support the local health care industry and those in need.
Respondents also urged actions by Utah resident, including:
- Increasing online spending at Utah companies.
- Continuing to shop when able to safely do so.
- Practicing social distancing, effective hygiene and supporting those in need.
The next 10 days will be critical for Utah and all teams working to alleviate this challenge. We ask for your patience and promise to continue to work across disciplines to innovate and encourage everyone to maintain a proper perspective. The task force will use this and other data to make decisions to best help Utah businesses weather the coming days and months. We believe that while all business is affected and requires support, each has the opportunity to assist others.
Now is a time of unselfish and extreme ownership. Startups are enterprising and working hard to bend this curve with technology, products and services. They, along with all creative companies, can use this tumultuous time to lock in innovation gains for the future.
The research report can be found at edcutah.org.
For a compendium of business resources, please visit coronavirus.utah.gov. For more information regarding efforts by Economic Development Corporation of Utah and its investors to support Utah’s businesses and economy, please visit edcutah.org or follow us on Twitter (@edcutahorg).
Derek Miller is the president and CEO of the Salt Lake Chamber and chairman of the Governor’s Economic Response Task Force.
Theresa Foxley is the president and CEO of the Economic Development Corporation of Utah.