Anne Arundel Businesses Battle Recession, Face 'New Normal'

ANNE ARUNDEL COUNTY, MD — As Anne Arundel County approaches one year since its first coronavirus infection, local entrepreneurs hope to dig out of the lingering economic decline. Some leaders predict that establishments will face a "new normal."

Business heads are brainstorming ways to embrace this future. Such changes may affect industries in different ways, but these executives think they can adapt.

Patch recently partnered with several local organizations to bring you their latest news. This guest contribution comes from the Anne Arundel Chamber of Commerce. Here's what President and CEO Mark Kleinschmidt wrote about economic recovery:

"It was mid-March last year when we realized the severity of COVID-19. At that time no one could have predicted the negative impact it would have on the national and local economy. Unlike previous economic slowdowns, the COVID recession caused a significant reduction of revenue for many businesses and a loss of tax dollars for the local and state governments. It forced many businesses to close their doors forever.

We saw the US unemployment rate jump to 14% and the Maryland unemployment rate to 10% in April of 2020. Meanwhile economic activity measured in national GDP fell by 30% in the second quarter of 2020. Businesses of all sizes were impacted but unfortunately small businesses were hardest hit.

Businesses with “strong balance sheets” or more simply stated businesses that had operating reserves in the bank have been able to weather the storm, while others who did not had to scramble to survive. Now that the economy has started to recover because of the effectiveness of public health regulations and the increased distribution of the vaccine.

Many businesses are starting to wonder what the economic conditions will look like for the rest of 2021. In an effort to answer this, the Chamber is hosting a virtual Economic Outlook lunch on February 18th. We will have an economist from the Federal Reserve Bank and three Anne Arundel County CEOs share their thoughts and insights about future economic conditions.

As I have talked to various business owners over the last few months, many of them spoke about getting to the other side of COVID recession and taking steps to adjust their business to meet the new economic conditions. They are basically building a bridge out of the COVID recession and most have used a combination of these three strategies.

First, they were able to pivot and develop new ways to connect with their customers and clients through social media. Sometimes they even offered a new product or service. Secondly, they reduced operating costs to match their reduced cash flow due to the significant reduction in sales. Unfortunately, a lot of this cost cutting came in the form of layoffs and furloughs which drove up the unemployment numbers and took out a lot of “buying power” out of the economy. Finally, many businesses sought out financial assistance that was being offered by all levels of government.

At first many business were hesitant to seek out financial assistance from the government but in time thousands of Maryland businesses were looking into the first stage of the PPP loans and right now many more businesses are applying for the second stage funding from the PPP loans. The State of Maryland, Anne Arundel County and the City of Annapolis also offered loans, grants and programs to help primarily small businesses build the bridge out of the COVID recession. Without the financial assistance programs offered by all levels of government, the COVID recession would have been much worse.

I would encourage small business owners to check out the various financial assistance programs even if this is something you have never considered before. The COVID recession is a once in a lifetime event and you should take advantage of any assistance to help you build your bridge to the other side.

But what will be on the other side of the bridge out of the COVID recession? Many economists are calling the other side the “new normal” where we will see more people working from home, a consistently higher rate of unemployment with a slow ramp up of consumer spending and some industries particularly restaurant, entertainment, and travel continuing to struggle.

A key factor for the economic recovery will be the return of consumer confidence which will increase with the roll out of the COVID vaccine, the return of a consistent and safe “in-school” schedule for K-12 and the continuation of programs and polices from all levels of government that provide assistance to small businesses.

It was not an easy feat to build the Bay Bridge and it will not be easy to build a bridge out of the CVOID recession. We are hopeful that the worst of the COVID recession is in the rear view mirror and we can slowly move into the “new normal”.

To find out more about the economic recovery make plans to attend the Chamber’s virtual Economic Outlook Lunch on February 18th. For more information go to annearundelchamber.org and click the events tab.

Mark Kleinschmidt is the President and CEO of the Anne Arundel Chamber of Commerce located in Annapolis, MD."

To see when you'll be eligible for the inoculation, read Patch's explainer. Check out our how-to guide to learn how to sign up for the shot. Catch up on the latest coronavirus infection and vaccination metrics in Anne Arundel County by heading to our latest numbers update.

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