Romer: Optimism abounds and normalcy is in sight
I love data. I believe that data is essential to making sound decisions. Analyzing data provides the capacity to anticipate and plan for future events. And right now, the data is all trending positive, which leads to increased optimism that we have turned the corner.
The U.S. Chamber and MetLife recently released the Q1 2021 Small Business Index — a survey of small businesses to take the temperature of the sector, see where small business owners are confident, and where they are experiencing challenges. The Q1 2021 index in particular focused on how the distribution of coronavirus vaccines is influencing the attitudes of small business owners toward the return to normalcy.
Economically, small business owners are a mixed bag, with half seeing their business health as good amid a backdrop of a worsening economy. Half of small businesses (52%) say their business is in good overall health, in line with sentiments across the last 10 months, but down 14 points from Q1 2020 before the impacts of the pandemic had been felt. In contrast, fewer small business owners rate the U.S. economy as “somewhat good,” down nine points from Q4 2020 and the percentage saying the country’s economy is in poor health is up nine points from Q4.
Among other insights, the Q1 Small Business Index finds that:
- 54% of small businesses say the availability of coronavirus vaccines makes them feel more optimistic about their own business’s future
- 59% of small businesses this quarter predict it will take six months to a year to get back to normal
- 91% of small businesses are concerned about the pandemic’s effect on the national economy and 59% of small businesses rate the overall U.S. economy as poor
The reduction in COVID-19 cases, the rollout of the vaccine, the opening of the economy in many states, and federal stimulus have improved economic activity and the labor market. The outlook for 2021 is more favorable than it was six months ago.
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Colorado’s indicators are better than the national numbers. Colorado’s real GDP growth rate for 2021 will be slightly higher than the U.S. rate. It will return to its pre-pandemic value in 2021. Retail sales will rebound in 2021 as a result of pent-up demand. Sales are expected to level off at pre-pandemic levels in 2022. There is more upside potential than downside risk in the Colorado economy.
The General Assembly introduced one of the first rounds of stimulus bills in the House and Senate. These are the first of many policies aimed at Colorado’s recovery, focusing on school investment, rural support, utility aid and job creation. Eight bills were introduced last week which address a range of issues, including infrastructure, rural economic development, agriculture and workforce development, and nearly all have bipartisan support. Additional stimulus bills are expected this week, including the Meetings & Events Incentive Program, which will support our special events & group and conference business.
The economic optimism, stimulus funds, and increasingly optimistic forecasts directly benefit Eagle County. Our tourism-driven economy is increasingly returning to normal levels. March lodging occupancy is expected to be near 2019 levels, and groups, meetings and events are primed to return with a vengeance in late Q2 into Q3. We have new summer air service to Eagle County Regional Airport from both Chicago (American Airlines) and Atlanta (Delta Airlines).
We are not back yet and there is still work to be done, but the data suggests we are not far off. The data reinforces the need to focus on building back better and prepare for business levels to continue to rebound.