Officials: Pandemic still carries economic uncertainty
Labor availability, supply chain disruptions cited
MARQUETTE — The COVID-19 pandemic is bringing concern — and hope — to the area, economically speaking.
Marty Fittante, CEO of InvestUP, spoke with The Mining Journal about how the COVID-19 pandemic has affected the region economically.
“I think it really kind of depends on the sector,” Fittante said. “Some sectors have come through reasonably strong and others, of course, are certainly struggling.”
Fittante mentioned an April general business survey conducted in the Ninth District of the Federal Reserve Bank of Minneapolis, which includes the Upper Peninsula. The survey, according to a news release from the bank, recorded 822 responses.
Labor force availability was the challenge most cited by respondents, followed by supply chain disruptions. Three-quarters of the firms said finding and hiring necessary labor was either “somewhat difficult” at 29% or “extremely difficult” at 45%.
By a sizable margin, respondents mentioned the generosity of current unemployment benefits and the work ethic of the unemployed as factors that affected labor participation, the survey reported.
“It certainly shows a struggle in the Upper Peninsula by many,” Fittante said. “Nearly a third of U.P. businesses in that survey reported seeing revenue down by over 25%. I think more concerning is 21% of the businesses that participated indicated that if things stay as is, they have no more than six months of solvency.”
Fittante said the U.P. firms provided 10% of the total responses for the survey, a number that he said gives “a good snapshot” but because of the small sample size, isn’t “statistically conclusive.”
Anecdotes beyond survey results, however, can provide more details.
“What we hear is a lot of anxiety, particularly in small businesses, particularly in certain sectors — hospitality,” Fittante said.
The hospitality industry includes service-based businesses such as restaurants, bars and motels.
Fittante said small businesses have been particularly vulnerable during the pandemic.
“They’re not equipped to withstand some of these types of pressures,” he said.
Things, however, could change with the upcoming summer tourism season and the U.P. doing “reasonably well” with vaccinations, he said.
“We saw last year that there’s hope coming,” Fittante said.
What should help, he noted, is the Restaurant Revitalization Fund, which opened on May 3.
On March 11, the American Rescue Plan Act of 2021 created the $28.6 billion fund within the U.S. Small Business Administration to provide grants for restaurants sustaining financial losses due to the COVID-19 pandemic, according to the National Restaurant Association website at restaurant.org.
Eligible entities for the grants include restaurants, food trucks or carts, bars, inns, breweries, bakeries and wineries, among other businesses.
Funds, according to InvestUP, may be used for payroll, mortgage and rent, utilities, construction of outdoor seating areas, and other business expenses.
“That should be a big help for a big part of that service-sector business,” Fittante said.
He said the local area has not been hit significantly with business closures.
That’s not the case everywhere.
Fittante said he was in Lansing several weeks ago, noting he thought its downtown businesses had not fared as well.
“We’ve been able to kind of muscle through, and it’s been a struggle and it’s hard, but I do think by and large businesses have been able to keep those doors open,” Fittante said.
What will it take to get back to normal — economically, at least — in the region?
A new plan
Fittante said guidance will come from the MI Vacc to Normal plan recently announced by Gov. Gretchen Whitmer.
The MI Vacc to Normal plan will use four vaccination-based milestones — using data for Michiganders 16 years or older who’ve received their first dose of the vaccine– to guide future steps required to get back to normal:
55% of Michiganders — 4,453,304 residents — plus two weeks
≤ Allows in-person work for all sectors of business.
60% of Michiganders — 4,858,150 residents — plus two weeks
≤ Increases indoor capacity at sports stadiums to 25%.
≤ Increases indoor capacity at conference centers/banquet halls/funeral homes to 25%.
≤ Increases capacity at exercise facilities and gyms to 50%.
≤ Lifts the curfew on restaurants and bars.
65% of Michiganders — 5,262,996 residents — plus two weeks
≤ Lifts all indoor capacity limits, requiring only social distancing between parties.
≤ Further relaxes limits on residential social gatherings.
70% of Michiganders — 5,667,842 residents– plus two weeks
≤ Lifts the Gatherings and Face Masks Order such that MDHHS will no longer employ broad mitigation measures unless unanticipated circumstances arise, such as the spread of vaccine-resistant variants.
The state reached the first milestone sometime between Sunday and Monday, with at least 55% of residents age 16 and over receiving at least one vaccine dose.
On Friday, Whitmer announced the MDHHS updated the Gatherings and Mask Order to align with the Centers for Disease Control and Prevention’s latest guidance on face coverings. The new order took effect at 9 a.m. today.
On Thursday, the CDC released updated guidance recommending “fully vaccinated people no longer need to wear a mask or physically distance in any setting, except where required by federal, state, local, tribal or territorial laws, rules and regulations, including local business and workplace guidance.”
Under the updated MDHHS Gatherings and Mask Order, Michiganders who are outdoors will no longer need to wear a mask regardless of vaccination status. While indoors, fully vaccinated Michiganders will no longer need to wear a mask, but residents who are not vaccinated, or have not completed their vaccinations, must continue to wear a mask or face covering to protect themselves and others.
After July 1, the broad indoor mask mandate will expire.
Fittante said the MI Vacc to Normal plan is promising. However, he’d like to see a regional approach.
“Much like COVID positive rates — where we were really much more fortunate — can you provide some additional incentive for this region by taking a look at this regionally in terms of a vaccination rate and a more robust opening?” Fittante said.
He expressed confidence that Upper Peninsula businesses will get through the pandemic with its resilient attitude.
“With the trend that you’re seeing — with vaccinations, with summer upon us — I think there’s great reason for hope at this point,” Fittante said.
Justin “Bugsy” Sailor, owner of the Upper Peninsula Supply Co., located at 221 W. Washington St., Marquette, expressed optimism for the summer following what he called a “sluggish” winter.
“I think it will be really busy again,” Sailor said. “I think this last stretch from January to now has been the hardest stretch for us, because if you consider February last year, we still had the UP200 and a lot of those events.
“So, going into this winter, those were all canceled, and those are big weekends for us.”
The UP200, for example, is a popular sled dog race that brings in visitors from out of the area. In fact, its well-attended start takes place on Washington Street in the heart of downtown Marquette where many small businesses — such as the Upper Peninsula Supply Co. — are located.
Other than being optimistic about the summer, Sailor acknowledged he’s trying to keep a good attitude — and his shop’s patrons might help.
“Customers have been fantastic,” he said.
Christie Mastric can be reached at 906-228-2500, ext. 250. Her email address is email@example.com