One in six local businesses increasingly fear they won’t survive the repercussions of the COVID-19 pandemic, and several already report shutting down, according to a survey released Wednesday by the Anchorage Economic Development Corp.
“We’ve got a long road in front of us in terms of the damage we’ve incurred already from COVID-19,” said Bill Popp, president of AEDC. “A fair number of businesses aren’t sure they’ll make it through this.”
The survey polled 195 businesses, but not all respondents answered every question. The survey found that 165 respondents, or 85%, said they experienced disruption to their business during the pandemic, including declining sales and job cuts, and changes to work patterns such as more employees working remotely.
Fourteen businesses, or 9% of respondents to the question, said they have already closed permanently, according to the survey, created in conjunction with the McDowell Group, a research firm.
The survey does not name the businesses.
The highest rate of closures came in the finance, insurance and real estate sectors, as well as the tourism and hospitality sector with the restaurants, bars and hotels that have suffered widespread layoffs.
Commercial real estate may be suffering amid business closures and lost tenants, but that’s speculation, Popp said.
“We’ll have to follow up on that and dig into it,” Popp said.
Jon Bittner, with the Alaska Small Business Development Center, said Congress needs to extend aid programs quickly. Many businesses are running out of federal benefits that were distributed under the CARES Act, and state and municipal relief grants being distributed under the act won’t last long, he said.
“I think that we’re in for a rough couple months, especially if the federal government doesn’t come through with a new relief bill with money for businesses and state and local governments,” he said.
Those shutdowns came atop other small-business closures, including The Perfect Cup restaurant in the Dimond Center mall in South Anchorage, Bittner said.
Other survey findings include:
∙ Twenty-four respondents, or about one in six, said their business faced greater risk of closing permanently than it did 30 days earlier.
∙ Fifty-seven respondents, or 37%, said their revenue outlook for the rest of the year has become increasingly pessimistic during the pandemic.
∙ 107 respondents, or 70%, reported a decline in revenue during the pandemic. About one in six businesses said the decline in revenue was greater than 50%.
∙ Sixty-six respondents, or 43%, made employment reductions. An additional 19 businesses, or 12%, said they expected to make additional job cuts.
Mark Harlan, owner of Marco T’s Pizzeria on Fireweed Lane, doesn’t know how long his business can survive during the pandemic. He’s laid off several employees and closed his restaurant in June, he hopes temporarily.
But he hopes the number of COVID-19 cases and the restrictions are better by the spring. Any longer and he may not survive to reopen, he said.
“It’s just the uncertainty,” he said. “I’m missing the pizza and good food we put out as much as anyone.”
The survey data highlights the sprawling pain caused by the pandemic, Popp said.
Statewide, more than 45,000 people have collected weekly unemployment checks for months on end, though numbers have slowly dropped over the summer. The unemployment rate has remained above 11% over four months after hitting unprecedented levels above 13% in April.
A silver lining is that 111 businesses, or 80% answering the question, said their business was not at risk of permanently closing, Popp said.
Still, Anchorage faces a long winter of reduced business activity, he said.
The financial damage could be compounded by the lack of the usual October distribution of the Alaska Permanent Fund dividend that galvanizes spending in the fall, helping businesses keep workers and bridge the summer tourism and holiday shopping seasons, Popp said.
Congress needs to extend aid not just for businesses, but also for the unemployed, by continuing to provide boosted jobless benefits above the current level set by the Trump administration of $300, Popp said.
“We will need as much help as possible, for businesses and workers alike, to assure we have a solid economic base to stand on in the spring of 2021,” Popp said.
The survey is the third conducted by the AEDC since the pandemic began in March. In April, one in six Anchorage businesses reported they might not recover from the effects of the pandemic’s economic crash, AEDC found.