Wrangell businesses did better than those in Skagway but worse than their counterparts in the larger and more diversified economies of Juneau and Sitka during the economic shutdowns amid the COVID-19 pandemic, according to an online survey of business owners and managers throughout the region.
“On average, reporting businesses in the region lost 42% of their revenue due to COVID-19, while Wrangell businesses were down 48% overall,” the third highest for any community in the area, said the report issued by the Southeast Conference, comprised of chambers of commerce and local governments.
A total of 41 Wrangell businesses participated in the survey, among the 440 respondents across Southeast who answered the 19 questions April 9-23.
Skagway businesses reported the largest revenue loss at 61% due to the pandemic, which shut down cruise ship traffic and most other tourism in 2020, eliminating the bulk of the community’s economy.
Ketchikan, Petersburg, Gustavus, Haines and Hoonah were closely bunched with Wrangell in the middle of the pack. Faring the best during the pandemic were Juneau businesses, which reported a 35% drop in revenues, and Sitka, at 22%.
The Southeast Conference will conduct another survey next April.
The survey also asked businesses whether they were at risk of closure due to the financial strain of the pandemic, with Wrangell doing slightly better than the regional average. Across Southeast, 23% of the responding businesses reported they had closed or were at a significant or moderate risk of closing permanently. The number for Wrangell was 19%.
Not surprisingly, visitor and tourism, food and beverage businesses in Wrangell reported the largest drop in revenue due to the pandemic, with retailers reporting the smallest decline.
Federal aid payments over the past 15 months totaling as much as $3,200 per person, along with additional months of unemployment benefits at a higher rate covered by the federal government, have helped to lessen the pandemic hit to households.
In addition to direct federal aid to individuals, almost $18 million in COVID-19 relief funding went to Wrangell businesses, nonprofits, the borough, school district and the tribal Wrangell Cooperative Association. Most of that money was distributed under grant programs, with loans also included in the total — including Paycheck Protection Program loans that can be entirely forgiven if the money is used for payroll expenses.
The federal aid to individuals, businesses, nonprofits, the borough and schools total almost half of what Wrangell’s 1,000 households would earn in an entire year, calculated from U.S. Census statistics.
Nearly a quarter of Wrangell businesses that participated in the Southeast Conference survey reported that they would have closed permanently without the pandemic relief dollars. A fifth said the funding allowed them to retain staff that otherwise would have been laid off.
As it appears the worst of the pandemic’s hit to the economy had passed by the time the survey was conducted in April, only 12% of Wrangell businesses reported they plan further reductions in staffing levels. More than half said they expect to maintain job levels in the coming year, and 4% reported they expect to add employees.
Even before the pandemic, Wrangell was losing jobs. In 2018, the average employment number for the community over the entire year was 850, not counting self-employed people. In 2019, that number was down to 824 jobs, according to state Department of Labor statistics quoted in a separate Southeast Conference report.
The community lost about 100 jobs during the worst of the pandemic impact in 2020, the organization said.
Despite rebounding employment, millions of dollars in federal aid, the reopening of businesses and further gains in the community’s vaccination rate, “confidence in the Wrangell business climate continues to be incredibly poor in the wake of COVID-19,” the April survey showed.
“Nearly all (91%) of respondents are concerned about the state of the economy, calling the business climate poor or very poor. Nearly a third of survey respondents expect their prospects to get worse or much worse over the next year,” the 41 Wrangell businesses reported.
However, 27% of the respondents “expect the outlook for their businesses to improve in the coming year.”
After initial success at getting people vaccinated against COVID-19, the vaccination rate in Wrangell, and in Alaska, has slowed in recent weeks. As of Monday, according to the state’s vaccination website, 61% of Wrangell residents age 12 and older had received at least one shot of a vaccine. The statewide rate was 55%.
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