Question marks hang over Delmarva economy
From Delaware State News
This chart from Opportunity Insights Economic Tracker (https://tracktherecovery.org) shows the drop in spending in Delaware and its three counties. Sussex County has seen the slowest recovery. The data is drawn from private companies – from credit card processors to payroll firms – to provide a real-time picture of consumer spending.
DOVER — After three-and-a-half months, it is readily evident that the pandemic has hurt local businesses in a big way.
But, according to a Delmarva economy expert from Salisbury University, it is too early to assess their fates.
“There are so many unknowns that are holding question marks over us, in terms of which businesses are going to be harmed in what ways,” said Memo Diriker.
“What we do know is that a certain percentage — a significant percentage of businesses — are going to find it very difficult to be in business this time next year.”
Consumers were starting to spend a little more freely once restrictions eased, but will that curtail greatly again as cases and concerns about COVID-19 rise?
Can businesses pivot to a model that better relates to contactless service?
Can businesses hold on with the help of government stimuli, such as the Paycheck Protection Program?
What if a second wave of the coronavirus arrives with flu season?
“What we’re seeing, really, is that this is the weirdest ‘dominos falling’ scenario,” said Dr. Diriker. “Some of the things will happen almost in slow motion.
“There have been some businesses that were operating at the edge of profitability, or at the edge of sustainability, and those are the ones that are currently most vulnerable — PPP or not.”
Dr. Diriker is director of the Business, Economic, and Community Outreach Network (BEACON) at the Franklin P. Perdue School of Business at Salisbury University.
One of his immediate gauges of Delmarva’s economy is actual sales.
“The most important thing is consumer spending power,” said Dr. Diriker. “In the state of Maryland, sales tax revenues are dipping compared to the previous year of the same period.
“That’s a warning sign.”