Your survey responses helped us understand how COVID-19 has impacted the Hamilton County economy so far.
Between March 20 and April 27, we asked local businesses to tell us about their ever-changing situations so we can continue our work to establish strong footing for recovery. More than 250 businesses responded and the results show the stark reality of the tough work ahead – but also the optimistic spirit of our community.
While 250 businesses is a small response number relative to the 17,000 businesses in Hamilton County, these results offer critical insights.
KEY FINDINGS – percentages rounded
- 73% reported decreased revenue
- 19% changed operational systems
- 5% reported no impact
- 2% reported increased revenue
- 37% decreased revenue by 76% or more
- 60% decreased revenue by over 50%
- 30% of businesses have closed
- 47% expect to be closed for 5-8 weeks; 43% for more than 9 weeks
- 40% have had layoffs or have furloughed employees
- 34% expect their business will be impacted 4-6 months; 51% expect over 7 months
- 50% report they will reduce variable cost and 42% state they will reduce fixed costs
• Decrease in revenue/sales is the most cited impact at 85%, followed by economic downturn & impact on business at 51% and employee wellbeing at 45%
• Hospitality, personal services, hospitals and health care, retail and advertising reported the most severe impacts
OVERVIEW
The impact of COVID-19 on business operations and revenue in the Chattanooga region is widespread. Some 74% of respondents reported decreased revenue/sales and 30% have closed their businesses. Close to 90% expect to be closed for five weeks or more. The most frequently cited top impact was a decrease in revenue followed by the impact on business by the economic downturn and the wellbeing of their employees. For a limited number of businesses, the inability to deliver core products and supply chain disruption were cited as the top concern.
Business anxiety about the future is high. When asked to anticipate the severity of overall impact from COVID-19 on a 10-point scale where one is minimal impact and 10 is possible business closure, 22% of respondents reported a level of 10; nearly 15% reported a level of 9; and 15% reported a level of 8. While the nature and severity of impact vary widely by sector and specific business, COVID-19 has caused widespread business disruption.
BUSINESS CONCERNS/NEEDS
Accurate and timely information – hunger for information is high, particularly about applying for government loans/grants and when and how businesses will be allowed to reopen.
Loans/Grants – access to working capital with speed and efficiency in processing is the biggest need. Some of the hardest hit businesses won’t be able to cover their payroll or rent payment without help. Almost all respondents were aware of the CARES Act program and 58% felt the Paycheck Protection program was the most beneficial. Anxiety is high over the application process and new legislation to approve additional funding.
Support for displaced workers – unfortunately, employee layoffs in some sectors are deep. There are questions about the viability of the state’s unemployment fund and what the future holds for the unemployed.
Overall, businesses need decisive, effective government action in response to both the health and economic implications of COVID-19. They also need more clarity on the timeline for response and basis for future decisions.
Much about the virus is still unknown. The more controllable things are made clear, businesses will be better able to adjust plans and position for recovery.
SECTOR IMPACT
Advanced Manufacturing – Continued operation of production facilities is divergent across industry sectors. The automotive supply chain is primarily idled throughout the region and state, however food-related and heavy equipment manufacturers continue to operate and have even expanded operations. Volkswagen Chattanooga plans to resume production on May 3.
Construction/Engineering Services – projects already in the development pipeline are proceeding for now with minimal disruption. Crews and subcontractors remain active on job sites. Delays in permitting and building inspection as local governments adjust to new remote work protocols have the potential to hamper continued progress. Many report that the pipeline for future projects is thin, a potential warning signal for the duration of economic recovery.
General Business – from banking to accounting, IT to marketing, many professional service firms have transitioned to remote work environments and are busy helping their clients respond to urgent issues.
Health Care – in addition to being on the front lines of pandemic response, major players in the critical health care service and delivery sector, plus their supply chains, face unique workforce and supply chain challenges. The lack of non-essential medical procedures has had a negative impact on revenue for hospitals and physicians.
Hospitality (including hotel, food/beverage, event venues) – experienced a sharp, immediate impact with the majority reporting deep layoffs. Transition to take-out cannot replace much of the lost business. Many businesses in this sector, of all sizes, are vulnerable to closure without assistance.
Nonprofit/charitable – leaders in this important sector, both for employment and for critical human needs, are concerned about their capacity to raise needed funds to meet rapidly increasing needs. The severe weather and tornado damage only escalated the demand for services.
Real Estate – on the residential side, showings and listings are down sharply. On the commercial side, many property owners are already beginning negotiations with leaseholders and lenders. Several commercial projects have been placed on hold rather than being eliminated completely.
Retail – dramatically uneven impacts exist in this sector with grocery, pharmacy, home improvement and other essential goods retailers posting strong sales and struggling to maintain inventory while other retailers have been hurt dramatically.
Logistics – port activity and logistics continue to operate. All conditions are being monitored closely and Georgia’s deep-water ports remain open for business as usual. Overall trends do not indicate a huge hit at this point.
Summary – although COVID-19 has negatively affected our community, many businesses are resilient and have been using innovative means to stay in business. Our community has a strong history of working together so there is confidence we will make it through this crisis and learn many valuable lessons along the way. Economic development activity remains high and inquiries are coming in each day.
DATA COLLECTION
Information for this report collected March 20 – April 27 via:
- Electronic Economic Impact Survey sent to all Chattanooga Chamber members – 252 responses
- One-on-One calls to Chamber members (1,500+)
- Chamber Executive Committee
- Chamber Public Policy Committee
- Chamber Communications Committee
Additional surveys are planned throughout the duration of COVID-19 to determine the impact and overall recovery of our regional economy.
CONTACT
For more information about these findings and the impact of COVID-19 on Chattanooga area businesses, contact:
Sandra Brewer, [email protected]
Vice President, Membership & Investor Relations
Chattanooga Chamber of Commerce
