COVID-19 economic survey shows businesses adapting to new reality

Posted on May 20, 2020 :: Insight on Business, Web Exclusive
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Posted by of Insight Publications

Many Wisconsin businesses responding to a second University of Wisconsin-Oshkosh statewide survey anticipate the impact of the COVID-19 pandemic to continue through 2020 and beyond.

Twenty-three percent of responding businesses reported an inability to remain open beyond three months if current conditions persist, said Jeffrey Sachse, director of the UW-Oshkosh Center for Customized Research and Services. But the 32 percent of respondents reporting they would likely survive beyond 10 months under current conditions points to a “greater sense of resilience,” he said.

“The cumulative impact of the survey results in April and May tell the story of businesses first responding to the emergency of the immediate impacts and now reassessing their new, long-term reality,” Sachse said.

UW-Oshkosh is partnering on the survey project with the Wisconsin Economic Development Corp. as well as New North Inc. and eight other Regional Leadership Council organizations to assess COVID-19 recovery ability and state and federal aid efforts. Additional collaborators include the Wisconsin Technology Council and the Wisconsin Workforce Development Association.

In the New North, some key numbers from the April and May surveys include:

  • $18.05 million economic loss
  • $3 million inventory loss
  • $5 million wage and productivity loss
  • 3,150 positions lost — this is just for May

Statewide, the key findings include:

  • 9,816 employee losses due to layoffs and furloughs in April in addition to the 8,795 reported in March
  • $28.8 million in inventory loss, a 62 percent decrease from April
  • $79.9 million in income loss, a 7.2 percent decrease from April
  • $26 million in wage and productivity losses, a 56 percent increase from April

“It is encouraging to see reductions in inventory and income losses, though respondents are less optimistic about their ability to recoup these losses,” Sachse said. “It will be equally critical to trace the survivability of vulnerable firms now that we have started to reopen the state’s economy.”

At the time of the May survey, 65 percent of businesses reported being open, with 74 percent of the remaining businesses expressing confidence they will be able to reopen soon.

“Based on the results of this survey, 77 percent of retail trade businesses and 90 percent of manufacturers believe they will be prepared to fully reopen in May,” said New North Executive Director Barb LaMue. “The sooner businesses feel they can be fully reopened safely and provide confidence to employees and customers, the more quickly we will be on the road to recovery.”

This month’s survey additionally asked two questions of interest to the Wisconsin Bankers Association and Wisconsin Technology Council.

Seventy-five percent of respondents reported seeking some form of financial assistance in the past month (Paycheck Protection Program and Economic Injury Disaster Loan, etc.). Only 61 percent of respondents reported receiving assistance, Sachse said.

Respondents reported access to capital and customers remain their most pressing needs. The most pressing information technology workforce needs reported both before and during the crisis are in IT support (18.3 percent) and network operations (9.6 percent).