Detroit Regional Chamber Business Leader Survey: Despite Worsening Conditions, Confidence in Sustainability

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As the regional business community shifts from response to restart as “Stay Home, Stay Safe” orders begin to ease, the Detroit Regional Chamber polled c-suite leadership in the Detroit region to gauge the level of confidence business leaders have regarding their prospects for surviving the COVID-19 crisis and their forecast for the balance of 2020.

This Chamber survey was conducted between April 14 to 30, 2020 with responses from 75 regional executives.  Respondents encompassed board members from the Detroit Regional Chamber, Automation Alley, Chaldean American Chamber of Commerce, Macomb County Chamber, and Southern Wayne County Regional Chamber representing leaders of businesses of all sizes and multiple industry types.  Nearly 50% of respondents represent entities of 100 employees or less.

The Chamber conducted the targeted survey of the executive leadership of the Detroit region.  Data collection was conducted via online survey methods.

Survey highlights:

  • 100% of respondents expect their organization to survive the crisis.
  • 76% of respondents expect their organization to be in worse condition on June 1st, compared to February (prior to COVID-19 impact).
  • 56% of respondents expect their organization to be in worse condition on September 1st, compared to February (prior to COVID-19).
  • 60% of respondents expect payroll levels at their organization in September to be the same or greater than February 2020 levels.
  • 52% of respondents have applied for, received, or otherwise benefited from loans or grants from a government-sponsored entity/program.

COVID-19 Revenue Impact

Respondents were asked to describe the level of impact COVID-19 has had on their organization’s revenues. Nine of 10 respondents report a negative revenue impact.

  • 45% report significant negative impact
  • 24% report moderate negative impact
  • 20% report a minimal negative impact
  • 10% report none or positive revenue impact

Respondents universally believe they will weather this storm. Half of all respondents are confident they will continue to operate, with the other half worried slightly, anticipating operations to be reduced.

  • 51% confident, will continue to operate
  • 49% worried slightly, will continue to operate, but at a reduced level

 Expectation of Business Conditions in 2020

Business leaders were asked about the expected conditions of their organizations in the coming months.

By June 1, 2020:

  • 76% expect their organization to be in worse condition than February 2020, prior to COVID-19 impact
  • 20% expect their organization to be in the same condition as of February 2020, prior to COVID-19 impact

By September 1, 2020:

  • 24% expect their organization to be in better condition, condition than February 2020, prior to COVID-19 impact
  • 20% expect their organization to be in the same condition, condition than February 2020, prior to COVID-19 impact
  • 56% expect their organization to be in worse condition, condition than February 2020, prior to COVID-19 impact

 Payroll Levels

By September 2020, over half of respondents expect payroll levels to return to, or exceed, pre-COVID-19 levels of February 2020.

  • 13% greater payroll levels than in February 2020
  • 47% same payroll levels as in February 2020
  • 40% less than payroll levels in February 2020

 Spending on Key Business Functions

A strong majority of respondents, 64%, expect decreased spending on key business functions (e.g. payroll, upgrades to technology, physical plants, or marketing) for 2020 compared to pre-COVID-19 plans.  Fourteen percent expect key business function spending to increase.  Key business plan spending for the remainder of 2020:

  • 6% increase significantly
  • 8% increase minimally
  • 20% stay the same
  • 34% decrease in minimally
  • 30% decrease significantly

 Financial Support 

Over half of respondents replied that their organizations have applied for, received, or benefited from loans or grants from a government-sponsored entity.  A third of respondents report no need to obtain financial assistance

  • 52% loan or grant from a government-sponsored entity (e.g. SBA loan/grant, Michigan Small Business Relief Program)
  • 11% extension, discount or elimination of a debt owed (e.g. loan, rent, vehicle or credit card payment)
  • 12% deferment or reduction of an obligation or expense (e.g. tax or utility payment)
  • 35% have not needed financial assistance yet
  • 16% other financial relief provided by any authority, nonprofit, business partner or stakeholder

 Restart Plans

As organizations prepare to restart operations, respondents are anticipating a range of factors they will need to address. A quarter of respondents have not had to stop operations.

  • 53% expect expanded or newly implemented deployment of personal protective equipment (PPE) such as masks or gloves
  • 47% expect reduced capacity due to social distancing practices (e.g. fewer customers allowed in establishment, fewer in-person gatherings, reduced production capacity)
  • 43% expect a change in market demand for my organization’s product or service
  • 25% expect operations to return to close to normal, other than reduced demand during the re-start period

View the detailed survey results, which includes direct input comments. All surveyed respondents’ names and companies are private and will not be issued publicly.

 

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