After two years of a pandemic so mutated that it affects every aspect of life it can feel like there’s not much to hope for.
But after Wilmington Trust’s 2022 capital market forecastwith the dark title “Economic Arrhythmia: Companies Adapt to Resource Disruptions”, most of the 1,000 business owners surveyed are optimistic – even very optimistic – about the future.
And this despite a labor shortage, interruptions in the supply chain and COVID-19 increases.
A whopping 87% of business owners surveyed said they were optimistic about their business, and 77% were optimistic about the US economy as a whole, slightly less than the 81% reported in the first quarter of 2020 before COVID-19.
There are caveats and loopholes as you might expect. Large companies weather supply chain disruptions much more easily than small companies. 88% of large companies see an improvement in the supply chain in the summer and fall, compared to 52% of small companies. Large firms were also twice as likely to be able to increase capital spending to address labor problems, with nearly half of large firms increasing compared with 23% of small firms.
Just under half – 44% – have raised wages due to labor shortages, with 45% offering better benefits to workers.
Remote working has become a standard proposition for many companies, and for those who maintain a remote working model for at least some employees, 60% plan to reduce office space. Still, less than half say COVID-19 is the biggest factor affecting their business over the next 12 months (but it was the most cited factor).
the Paycheck Protection Program is cited as an important factor to keep your company afloat or even grow in 2020.
A case study by Allianz material handlinga Maryland-based warehouse solutions provider based in Delaware, cited PPP as the driving force behind its growth since 2020. Chairman and CEO Thomas Baum said the company was on the verge of laying off a quarter of the company when PPP came out, giving workers jobs like painting when they were unable to do their regular jobs due to the pandemic. Alliance was able to close a profitable deal during the lockdown and when warehouses reopened their forklift repair services were in great demand.
Low wages are cited as the main driver of labor shortages, but the impact of technology on most industries is even greater. In many cases, the gap is caused by what is known as a skill mismatch or a lack of effective workforce, at least until workers can be retrained. In fact, we’ve seen significant investment from New Castle County CARES law Funding aimed at staff development and an increase in technology coding programs in Wilmington, where people looking to fill those gaps have several options to choose from, including Wilmington zip code, code different, IT works, technical elevator and Delaware Tech Community College.
Some growth is expected simply because some levels have dropped so low. Inventories plummeted in 2021 and the anticipated replenishment phase in 2022 is expected to spike growth over the course of the year.
Probably the biggest finding is that technology across the board is driving the expected growth surge, with information technology making up by far the largest share in late 2020, accounting for 28% of the S&P 500 grants, up from 6% in 1989.
You can get the full report from Wilmington Trust, a subsidiary of M&T Bankon his survey page; a link to the PDF is above. What do you think of the results of the report? Are you just as optimistic about the future of your company and the economy? Send us your answer at [email protected]