CLT Alliance COVID-19 Economic Index
The effects of COVID-19 continue to ripple through the Charlotte Region’s economy. To keep track of the rapidly changing environment, the Charlotte Regional Business Alliance in partnership with the Charlotte Regional Researchers’ Collaborative (including members from the Federal Reserve, CRVA, City of Charlotte, Charlotte Works, regional county researchers and others) launched an economic impact survey of local businesses.
The following information presents a baseline of data on key indicators including:
- Layoff activity
- Gross income changes
- Supply chain issues
- How long companies can maintain operations
In three key industry segments:
- Accommodations, Entertainment and Retail
The results below cover the week of April 6 through April 14 with 96 respondents from throughout the region representing a cross section of key industries.
- Layoff activity
Layoff activity remains concentrated in the Accommodations, Entertainment and Retail sector with increasing numbers of respondents saying they had laid off staff or reduced staff hours. While the recession started most immediately in the service sector, layoff activity began to pick up in the industrial sector as well with the percentage of industrial firms reporting layoffs or cut hours increasing and the percentage reporting increased hiring dropped. The office sector had the lowest percentage of firms reporting layoffs and the highest percentage, 65 percent, reporting they had not laid off any staff.
Optimism for hiring over the next 30 days contracted this week, with fewer companies across all industries reporting plans to increase hiring. In the office sector, fewer employers said they planned to lay off staff in the near future, another silver lining for office-based firms. On the industrial side, however, fewer companies said they did not plan to lay off staff in the coming 30 days.
In terms of income loss over the past 30 days, the office sector once again appeared brightest with more than 40 percent of companies reporting no decline in revenue. Industrial respondents were most likely to report declines of less than 25 percent while nearly half of Accommodations, Entertainment and Retail respondents reported more than 75 percent gross income loss leading up to the survey period.
Companies across the board were less optimistic about their income in the coming 30 days, with declines in the percentage of firms predicting no decline or even growth in revenue and increases in firms predicting revenue loss of more than 75 percent, in every industry segment. Accommodations, Entertainment and Retail respondents predicted the largest loss with 70 percent of respondents in that segment predicting more than 75 percent revenue loss.
- Supply Chain Effects
Supply chain concerns among Office based and Accommodations, Entertainment and Retail sectors were largely down this week, while about 59 percent of Industrial sector respondents faced some issues with supply chains domestically and abroad.
How long can you maintain business operations given the current situation?
As stay at home orders remain in place and consumer spending continues to contract, many businesses are relying on savings, federal relief or a combination of the two to maintain operations. A segment of Accommodations, Entertainment and Retail respondents in our survey had the shortest time horizon for maintaining business operations with more than 20 percent reporting less than 30 days. No office or industrial companies reported a time horizon 30 days or less. Industrial companies were more likely to have longer timelines with half reporting they could maintain operations for more than 90 days.
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