April 20, 2020
Ohio will begin a gradual phased-in reopening of the state economy beginning May 1. Governor Mike DeWine has asked various business and industry groups for plans this week on how they can reopen and ensure the safety of customers and employees. The Governor has been clear that public health is the priority and that reopening will be incremental.
JobsOhio awarded sixteen companies in the Ohio Southeast region JobsOhio Work Force Retention Loans totaling over $9 million. If the funds are used to keep workers on the job, the loans will be forgiven. The loans focused on existing JobsOhio customers in the targeted sectors that drive Ohio’s economy. In the last 30 days, JobsOhio has approved or is in the process of approving over $200 million in COVID-19 related relief initiatives. This week, we expect another announcement of JobsOhio partnering with a lender in the region to support small businesses outside of traditional target sectors.
The SBA’s Paycheck Protection Program (PPP) is currently out of money. The initial $349 billion appropriation assisted 1.6 million small businesses. The SBA processed what would have normally been more than 14 years’ worth of loans in less than 14 days. An additional appropriation is being discussed. Small businesses needing a loan should talk with their lenders about preparing an application in anticipation of more funds.
A downside to the Federal stimulus bills: the additional unemployment payments in the stimulus package of $600 per week are a deterrent to returning to work. The $600/week (federal stimulus) plus $347/week (Ohio Southeast region’s weighted average unemployment insurance) equals the equivalent of $49,244/year in wages. According to “Talent Supply by Compensation” data from Emsi, 73% of the region’s work force made less money than that when working.
In just four weeks, 22.3 million workers, or 14% of America’s workforce filed for unemployment. The Conference Board Leading Economic Index for the U.S. declined 6.7% in March – its largest decline in 60 years.
What does economic recovery look like? It’s hard to predict, but expect supply chains to be less dependent upon distant countries. As reported by the Wall Street Journal, the American Chamber of Commerce in China’s March survey found significantly fewer big companies saying “decoupling” international supply chains is “impossible” than they reported in October. Also, more than a quarter of the companies plan to start sourcing some or all of their materials from different locations.
Some good news in Ohio:
Procter & Gamble, headquartered in Cincinnati, posted the biggest U.S. sales gain in decades as shoppers rushed to stock up on medicine and cleaning supplies.
The Dayton Medical community and physicians at Wright-Patterson AFB have coordinated on a potentially groundbreaking treatment for COVID-19 patients using transfusions of plasma from previous survivors.