SALISBURY –Eastern Shore business owners and managers optimism is on the decline regarding the economic outlook over the next 12 months.
These trends are among the findings of the latest Eastern Shore Business Sentiment Survey conducted through a partnership with Salisbury University’s Business Economic and Community Outreach Network (BEACON), SU’s Eastern Shore Regional GIS Cooperative (ESRGC), and many of the region’s economic and workforce development professionals.
The June 2022 results are the third report released by BEACON and its partners and the first to include all nine Eastern Shore counties. The first survey in the series was conducted in June 2021 and a follow-up in December 2021.
The survey included more than 50 questions, asking business leaders to weigh in on a range of topics, from general business concerns to conditions in their own industries. Respondents evaluated business conditions locally, regionally, in the state and nationwide for the coming year. They also shared views related to their specific industries and on issues from labor supply to regulations.
Results include that optimism about business conditions in respondents’ respective counties over the next 12 months, has declined dramatically with almost 43% answering worse or much worse compared to 18% in December of 2021 and 6% in July of 2021. They predict that conditions will be worse statewide and nationally.
Respondents also indicate that COVID-19 has caused new problems for businesses and has exacerbated existing problems, particularly related to workforce, a response that reflects national trends.
Reflecting on their individual industry sectors, respondents were also cautious about conditions in the next three months. In December 2021 almost, 73% predicted conditions would be the same (35%) or worse (38%). In June 2022 the prediction of worse conditions is up, with over 45% saying they expect worse conditions in the next three months, and 28% predicting same.
Predictions of better conditions are virtually unchanged, dropping to 26% from 27% in December 2021. Predictions for the next 12 months have also dropped, with 53% selecting worse or much worse compared to 34% in December and 12% last July. This round only 30% predict improving conditions in 12 months compared to 45% in December and 68% last July.
Concerns about inflation remain the highest concern as a barrier to starting or expanding business in the respondent’s sector, but labor force issues are of equal concern. Supply chain issues are third for both expanding and starting a new business.
The industry with the biggest concerns for conditions in the next 12 months was real estate, followed by transportation. Funding and inflation were driving concerns in real estate. Inflation (fuel costs) and labor force issues were the biggest concerns to the transportation industry.
Business owners and managers also continue to express that COVID-19 has had a significant impact on their businesses, just not as high as in December and remain supportive of the range of tools that economic development offices have deployed.
The majority (78%) of responses came from owners or senior executives, and 79% were from firms with less than 50 employees. Responses were from a wide range of industries, and only accommodations, food services, arts, entertainment, and recreation (formerly “tourism and hospitality”) accounted for more than 10%.
“We are pleased the survey includes the business community in the Upper Shore counties this year,” said Jamie Williams, Kent County economic and tourism development director. “This will allow the Upper Shore to better articulate the concerns of our businesses to our legislators, and allow us to better serve their needs.”
“We are glad that the survey includes the business community in Queen Anne’s County this year,” said Heather Tinelli, Queen Anne’s County economic and tourism development director. “It will allow the Upper Shore to serve the needs of our business community.”
“When we sponsored the first survey in July of last year, our goal was to eventually incorporate all three regional councils on the Eastern Shore,” said Scott Warner, executive director of the Mid-Shore Regional Council. “We are so pleased that BEACON and the other councils were able to quickly expand the geography and include all nine counties in this study.”
Counties on the Eastern Shore will continue to conduct the survey every six months, with the data used to identify challenges facing the region, to assist in long-term planning and to guide the development of public policy.
The ESRGC summarized the findings in infographics that can be found on the Eastern Shore Economic Recovery Project website, but economic developers also have access to an internal dashboard that enables them to mine the data for insight on specific issues.
Designed to gauge the opinions of the region’s business leaders, this survey is one of the tools that has grown out of the Eastern Shore Economic Recovery Project, a venture made possible by grants totaling $507,000 from the U.S. Economic Development Agency (EDA). The Mid-Shore Regional Council and the Tri-County Council of the Lower Eastern Shore are recognized as Economic Development Districts by the EDA.
In addition to the regional councils, partners in the project include ESRGC, BEACON, the Lower Shore Workforce Alliance, the Upper Shore Workforce Investment Board, and the Caroline, Cecil, Dorchester, Kent, Queen Anne’s, Talbot, Somerset, Wicomico, and Worcester County economic development offices.
To access Eastern Shore Economic Recovery Project data, visit recovery.delmarvaindex.org. The complete Delmarva Index can be found at delmarvaindex.org.