A look at the business environment during the initial response to the pandemic
When Gov. Ron DeSantis issued statewide social distancing measures on April 1, it was done to head off predictions that Florida could follow New York’s lead in hospitalizations and deaths from COVID-19.
As we watched the Florida economy grind to a halt—particularly in the state’s southern counties, it seemed that we had somewhat dodged a viral bullet. This positive outcome has recently been overshadowed by quickly rising infections, with the state setting multiple records for new cases in late June and July.
While the initial lockdowns seemed to have worked initially and were less strict than certain states, businesses were severely impacted. With doors locked shut, workers furloughed, and some places filing for bankruptcy, the Greater Fort Lauderdale Alliance and Broward County issued a survey to gauge the pandemic’s economic impact. The research also strives to better understand the needs of businesses and identify opportunities to provide support.
A snapshot of the participants
Between April 20 (three weeks into the quarantine) and May 29 (nearly two weeks after Phase 1 of re-opening), the two groups began outreach to Broward businesses. Data collection resulted in 1,000 responses from businesses in all of Broward’s 61 counties, as well as 18 responses from Palm Beach, Miami-Dade, St. Lucie, Columbia, and Cook counties.
Of the responding businesses:
- 22% are in the professional services sector
- 8% are in the accommodation and food sector
- 8% are in the healthcare sector
- 8% are in the retail sector
In addition, the distribution of survey responses mirrored the county’s jobs distribution:
- 17% in professional services
- 12% in retail
- 12% in education and health services
- 9% in accommodation and food services
Key finding: operations and remote work
If there is any good news in the survey results, more than three-quarters of respondents (81%) said that their companies were open for business. Of these, 47% reported they were operating at regular hours and 34% at reduced hours.
Although 19% were not in operation during the studied period, it appears that remote work played a vital role in allowing many businesses to remain open. Sixty-six percent of respondents reported that either all (43%) or some (23%) of their employees were working remotely. Thirty-four percent indicated that they did not adopt this work option.
Key finding: Revenue, layoffs, and furloughs
This data gets to the economic heart of the matter—the bottom line for business and employees. Ninety percent of the respondents reported that the pandemic caused revenue losses, with 52% indicating their revenue had decreased by more than 75%. An additional 38% reported a decrease between 25% and 50%. Only 10% of businesses reported no revenue decrease (8%) or an increase (2%).
A closer look at job sectors provides an even clearer picture of the economic toll COVID-19 has taken on Broward businesses.
- Not surprisingly, tourism took the greatest hit, reporting an average revenue loss of 87%. It was followed by life sciences (80%) and arts and culture (77%).
- The financial sector reported the highest (31%) proportion of respondents with no revenue loss.
- Wholesale trade (6%), manufacturing (5%), and healthcare (5%) were among the handful of job sectors that reported increased revenue.
- 62% of respondents indicated that they did not lay off or furlough employees.
Key finding: Seeking assistance
The vast majority of companies (82%) applied for assistance through various federal and state programs. Although 241 respondents (18%) indicated they did not submit a single application for relief, the remaining companies (82%) applied for one or more stimulus sources.
- The most well-known of the relief packages is the CARES Act PPP, the record-breaking stimulus package passed by Congress. According to the survey, 73% of the 545 applications for the program were successful.
- In contrast, the Economic Injury Disaster Loan Program, administered through the Small Business Administration, had only a 39% successful application rate for 333 applications.
- At the state level, the Small Business Emergency Bridge Loan Program had the lowest success rate—just 17% of 99 applications.
Where do we go from here?
In many ways, that’s the most difficult question to answer. While the survey presents a better picture of COVID-19’s initial impact on Broward’s economy, the situation remains unclear as caseloads rise. Nevertheless, the data does provide insight into what worked for businesses and what didn’t during the lockdown, and potential areas for improvement and government support.
This is a conversation that needs to happen immediately. As of this writing, Florida has sequential spikes in new cases, ongoing debates about mask-wearing mandates, and businesses closed and fined for failing to adhere to COVID-19 preventative guidelines.
Morris Southeast Group continues to monitor the economic impact of the pandemic. And we will update our clients, colleagues, and readers as events unfold.
If you have any questions about CRE investing or services, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.
Tags: COVID-19, Impact on Businesses, Key Finding
