How is your company doing compared to others throughout Pennsylvania, New Jersey and Delaware?

Throughout the Pandemic, the Federal Reserve Bank of Philadelphia, has been surveying businesses in Pennsylvania, New Jersey and Delaware and gathering data to show how Covid-19 has affected businesses and their employees during the Pandemic. Their most recent survey shares how the Covid-19 shutdown has affected sales, ordering, employment and what may be impeding employment during this time.

Since last month there has been minimal changes in new orders and sales for Manufacturing and Nonmanufacturing Firms. While Nonmanufacturing Firms reported little to no change in new orders and sales, Manufacturers have reported an overall decrease. Still with just over 30% of all firms reporting an increase from -5% to 5% and only 1% of firms reporting they are still permanently closed (or remained closed), sales and new orders for firms seem to be staying somewhat stable.

(Please see graph below from the Federal Reserve Bank of Philadelphia)

The changes in new orders and sales can easily been seen in this next image. The timeline covers March 2020 to Last Survey resultes from August 2020 :

As you can see there has been a steady increase in new orders and sales for All Firms until the week of July 5th through the beginning of August 2nd. During this time there is little to no change. The increase could be directly correlated to the approval and use of PPP Loans obtained by companies, but we will only know the true effect the PPP Loans have had on industries in the upcoming months now that the PPP Loan compensation has ended.

To put into perspective how many companies may be affected by the conclusion of PPP Loan Compensation, the graph below shows the percentage of firms who sought help from the Small Business Administration.

Close to 80% of All Firms asked for assistance through a PPP Loan, and 90% of Manufacturers sought assistance.

Another survey in May shows how many firms were approved for a PPP Loan and what they were planning on using their Loans for. Almost 90% reported being approved for their PPP Loan and were planning on using their loans to keep their employees and to pay their bills/rent.

In the upcoming weeks and months, we will see what kind of effect the ending of PPP Loans will have on industries and how it will affect employment and closures.

Below is the graph with the results from the surveys answered in May:

Some questions to take away from the information shown above may be, how does your firm compare to those who were surveyed over the past few months? Do you agree or disagree? Do you feel like the PPP Loan that you received helped you, but are now unsure what to do in the upcoming future?

Along with sales and new orders are the decision that had to be made regarding the work force of many firms. As shown above, it is easy to see many firms used their PPP Loans to keep their workers employed. Without employees to help run their operations, firms would have had no choice but to close up shop for good.

In the Month of July, after having received PPP Loans, many employers were able to continue business practices with no changes to their Labor Force. Some were even able to hire new employees and recall furloughed workers. Less then 10% of firms surveyed said they had to lay off or reduce workers.

Have you hired employees and are now unsure if you are able to keep them on board? Are you thinking about the possibility of laying off employees if the economy doesn’t open? If you did furlough or lay off employees, will you be able to bring them back? Do they want to come back?

These are just a few questions many employers are asking themselves, and even though many employers were able to hire or recall employees, some, but not the majority, were met with resistance when attempting to replenish or strengthen their work force.

Employers are no longer having to just fill a needed position; they must also think about how their workers feel when coming back to work or if they want to return at all.

69% of firms reported to have no impediment when bringing in workers, but of the firms who did meet resistance manufacturers met their match because of expanded unemployment benefits and Nonmanufacturers saw an increase in fear of infection or lack of childcare. While overall there was a decrease in impediments to bringing back workers, there could be a swing toward lack of childcare and fear of infection, when schools return this fall and kids will be virtual learning from home.

Over the last 4 months it seems that even workers are unsure about how they feel returning to work. As you can see from the results of surveys, taken from May to Present, there is a constant change in what employers are seeing when it comes to their workforce:

Figure 1 Week Ending May 24

Figure 2 End of June 21

Figure 3 Week Ending July 5

Figure 4 Week Ending August 7

As an employer or owner of a company you should ask yourself, how do you compare to this data? What area do you feel most represents you? Are you unsure how to deal with employees concerns about returning to work? Do you need help making decision for your company and its future?

Turning Point Advisory Group has professionals with years of experience who can help you through these times. We can work with you and assist you with understanding what might be best for you and your company going forward. The future, for many businesses throughout the country, is uncertain. But there is no reason to try and navigate this path alone. We are here to help. Please contact us with your questions and concerns and we can help guide you along the way!

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Source: Federal Reserve Bank of Philadelphia | Research Department www.philadelphiafed.org

All graphs and surveys can be located at: https://philadelphiafed.org/research-and-data/regional-economy/covid19-economic-impacts