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Economy

Survey: 70 percent of small businesses say they are bracing for COVID-19 resurgence

Fifty-six percent report that they believe it will take six months to a year before the small business climate returns to normal.

Brandon Moseley

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The U.S. Chamber of Commerce reported Wednesday that the economic recovery is faltering amid growing concerns about a “second wave” of the pandemic. The small business recovery sputtered in recent weeks, according to a new poll of small business owners taken between July 9 and 16 released by the U.S. Chamber of Commerce and MetLife.

According to the polling, after retreating from record lows earlier this spring, key measures like perceived business health and cash flow have stalled, and the number reporting concerns around reopening guidance has increased. Despite this, small business owners remain unyieldingly optimistic with regards to future revenue and bullish on hiring and investment plans, the survey found.

Of those surveyed, 55 percent of small businesses are reporting good overall health. This is down 14 percentage points from the end of 2019. The number of small businesses that say they are in poor health has held flat at 18 percent over the month. It is double the number (9 percent) that reported the same at the beginning of 2020 prior to the pandemic; 45 percent are reporting they are not comfortable with their cash flow. This is three times higher than pre-pandemic levels.

“Small businesses face a cash flow crunch that is making it difficult for them to pay rent, payroll, and utilities,” said Tom Sullivan, U.S. Chamber vice president of small business policy. “It’s a long road to recovery, and these businesses are being tested like never before. Despite these considerable headwinds, our poll finds small businesses will innovate and fight their way to better days.”

Despite the stall around key measures of business health on Main Street, there are results showing cause for optimism. According to the poll, 86 percent of small businesses report that they have either fully or partially reopened since the pandemic began. The number of fully open businesses has climbed 11 percentage points since May.

53 percent reported that they expect next year’s revenues to increase. This is up from 50 percent in May and 47 percent from April. Just 18 percent of business owners expect their revenues to decrease next year. 35 percent of small business owners report that they are now more likely to increase investments in the upcoming year. This is up eight percentage points from May. This is nearly double the number that report plans to reduce investments (18 percent).

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“We know concerns remain among small businesses as they contemplate future spikes and a potential second wave of the virus,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “But the fact that 55% of owners say that their businesses are in good health and 53% say they expect next year’s revenue to increase, leaves room for some cautious optimism for the future.”

60 percent of small businesses report maintaining the same size staff over the last year. This is down from 67 percent in May. 20 percent report increasing staff. This is up from 13 percent in May. 30 percent however say that they anticipate increasing staff in the next year. This is up seven percentage points since late May). 29 percent report that they have adjusted their employee salaries or hours in response to the pandemic.

78 percent of small businesses remain concerned about the impact of coronavirus on their businesses. 65 percent are concerned that they will have to close again or stay closed if there is a second wave of COVID-19. Among those who have already had to endure a COVID shutdown, 85 percent report being concerned about a second wave. Small businesses in the South are the region most concerned about a second wave – 72 percent. The industry most concerned is the service industry at 72 percent.

Seventy percent of small business owners report they have adjusted business operations to prepare for a second wave of COVID-19 and a second wave of business interruptions. 30 percent report that they have been evaluating long term staffing plans or making plans for future layoffs to prepare for a second wave. 32 percent report that they are purchasing additional supplies to prevent shortages for another business interruption. 29 percent report that they are updating their website and/or social media profile(s) to prepare for a second business interruption. 25 percent report that they are ncreasing e-commerce or digital payment options.

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56 percent of small businesses expressed concern over the lack of guidance on proper reopening procedures. This is up eight percentage points from the previous report released in June.

“As America’s businesses look to reopen safely and keep their employees and customers healthy, employers are facing unprecedented new challenges and are looking for certainty from our elected leaders,” Sullivan said. “Main Street needs assurances from Washington that small business will remain a priority in rebuilding America’s economy. It’s a long road to recovery, but SBA loan assistance and nation-wide liability protections will help small businesses get back up and running at full speed.”

56 percent report that they believe it will take six months to a year before the small business climate returns to normal. This is in line with late May’s 55 percent. 7 percent responded that they think that it will never return to normal.

The Small Business Coronavirus Impact Poll is a special monthly coronavirus report, separate from the quarterly MetLife & U.S. Chamber of Commerce Small Business Index.

The U.S. has had 4,568,375 coronavirus cases thus far in the global pandemic. 153,848 Americans have already been killed by COVID-19, including 1,489 in Alabama. 2,245,521 have recovered from their illnesses.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

NAALC to hold public union event in Madison

The event will allow a variety of labor union members and officials to meet and discuss pertinent issues and planning. 

Josh Moon

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The North Alabama Area Labor Council will hold a solidarity event on Saturday in Madison, with several area labor union members present to answer questions from the public. 

The event, which will start at 9 a.m. at the Steamfitters and Pipefitters Union Hall on Madison Blvd., also will allow a variety of labor union members and officials to meet and discuss pertinent issues and planning. 

According to a press release from the NAALC, a number of current representatives from area unions will be present, including members from the American Federation of Government Employees Local 1858, International Association of Machinists and Aerospace Workers (IAMAW) Local 44, IAMAW Local 2766, Ironworkers Local 477, International Alliance of Theatrical and Stagehand Employees Local 900, American Postal Workers Union Local 259 and the International Federation of Professional and Technical Employees Local 27.

The union reps plan to discuss basic issues with anyone interested, such as the basic benefits of union membership and how to form a union at your local workplace. 

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Economy

New unemployment claims decreased last week

Fewer people joined the unemployment rolls last week compared to the week before.

Micah Danney

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There were 7,964 new unemployment claims filed in Alabama last week, down from 8,581 filed the previous week, according to the Alabama Department of Labor. 

Of the claims filed between Oct. 11 and Oct. 17, there were 4,032 related to the COVID-19 pandemic. That’s 51 percent, compared to 36 percent the previous week.

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Economy

Governor announces auto supplier IAC plans Alabama expansion

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County.

Brandon Moseley

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Gov. Kay Ivey announced Monday that International Automotive Components Group North America Inc. plans to invest over $55.9 million in expansion projects that will create 182 jobs at two Alabama facilities.

“International Automotive Components is a leading global auto supplier, and I am pleased that this world-class company is growing significantly in Alabama and creating good jobs in Cottondale and Anniston,” Ivey said. “IAC’s growth plans show that Alabama’s dynamic auto industry continues to expand despite today’s challenging environment.”

Nick Skwiat is the executive vice president and president of IAC North America.

“Alabama was the logical choice due to its skilled workforce and proximity to the customer,” Skwiat said. “We are excited to see the continued growth of the automotive industry in Alabama and we plan to grow right along with it. We thank the Governor and Secretary Canfield for their leadership in this sector.”

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County. This facility will produce door panels and overhead systems for original equipment manufacturers. That project will create 119 jobs at the production site in Cottondale.

IAC also plans to invest $21.6 million at its manufacturing facility located in the former Fort McClellan in Anniston. That East Alabama project will create another 63 jobs.

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This project builds on a milestone 2014 expansion that doubled the size of the Calhoun County facility. There IAC manufactures automotive interior components and systems. Key components produced at the Anniston plant include door panels, trim systems and instrument panels for original equipment manufacturers.

IAC Group is a leading global supplier of innovative and sustainable instrument panels, consoles, door panels, overhead systems, bumper fascias and exterior ornamentation for original equipment manufacturers.

IAC is headquartered in Luxembourg and has more than 18,000 employees at 67 locations in 17 countries. The company operates manufacturing facilities in eight U.S. states.

“With operations around the globe, IAC is the kind of high-performance company that we want in Alabama’s auto supply chain to help fuel sustainable growth,” said Alabama Commerce Secretary Greg Canfield. “We look forward to working with IAC and facilitating its future growth in this strategic industrial sector.”

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Danielle Winningham is the executive director of the Tuscaloosa County Industrial Development Authority.

“International Automotive Components is a valued part of Tuscaloosa County’s automotive sector,” Winningham said. “We are grateful for IAC’s investment in our community and the career opportunities available to our area workforce as a result of their investment.”

“The City of Anniston is excited that IAC has made the decision to expand here. I have enjoyed working with the leadership at IAC, the Calhoun County EDC, and the state of Alabama to get this project finalized,” said Anniston Mayor Jack Draper. “This is even further evidence that Anniston is indeed open for business.”

Only Michigan has more automobile manufacturing jobs than the state of Alabama. Honda, Mercedes, Hyundai, Polaris, Toyota and soon Mazda all have major automobile assembly plants in the state of Alabama.

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Courts

Aderholt fully supports Barrett’s confirmation process

Confirmation hearings began last week and a vote on her confirmation is expected in the next week just days before the general election.

Brandon Moseley

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Congressman Robert Aderholt

Congressman Robert Aderholt, R-Alabama, updated his constituents on the confirmation process for Supreme Court nominee Amy Coney Barrett. Aderholt said, “I do support her fully and I know she will defend life, protect the Constitution, and uphold our freedoms.”

Confirmation hearings began last week and a vote on her confirmation is expected in the next week just days before the general election.

“Senate Democrats are not seriously questioning Judge Barrett on her credentials, instead they have decided to attack her character and her beliefs,” Aderholt said. “I am disappointed to see this unfold on the national stage, but I think Judge Barrett stood strong and did well during this first week of hearings.”

“While I do not have a vote in her confirmation process, I do support her fully and I know she will defend life, protect the Constitution, and uphold our freedoms when she is officially sworn in as an Associate Justice on the Supreme Court,” Aderholt said.

Barrett is a Notre Dame graduate, has served on the U.S. Seventh Court of Appeals and is a former clerk for the late Supreme Court Justice Antonin Scalia.

“I clerked for Justice Scalia more than 20 years ago, but the lessons I learned still resonate,” Barrett said. “His judicial philosophy is mine, too: A judge must apply the law as written. Judges are not policymakers, and they must be resolute in setting aside any policy views they might hold.”

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Barrett vowed to keep an open mind on any matter that comes before the court, though Democrats fear she is prepared to overturn Supreme Court precedent on abortion rights and the Affordable Care Act.

That the Republican controlled committee will recommend that Barrett be confirmed appears certain. A vote to confirm Barrett to the nation’s highest court by the full Senate could occur just days ahead of the Nov. 3 election.

President Donald Trump has been the president of the United States for less than four years but if Barrett is confirmed, then he will have selected one third of the U.S. Supreme Court. Barrett fills a place created by the death of the late Associate Justice Ruth Bader Ginsburg, who died in September.

Aderholt is in his 12th term representing Alabama’s 4th Congressional District. He faces Democratic nominee Rick Neighbors in the Nov. 3 general election.

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