Sales soared at a national seed supplier, but crashed at the clothing stores that were forced to close for weeks. Bikes and kayaks were back-ordered for months, but the hospitality industry suffered staggering losses.
The Covid-19 emergency produced a year in business unlike any other, and has created a complex mix of winners and losers.
Bolstered by billions of dollars in federal grant money, almost all of the Vermont businesses that had to shut their doors or limit operations during the worst of the pandemic are still hanging on. Many have used their time and their grant money to come up with innovations to help them keep going under complex new rules. Legions of others have updated out-of-date websites to start selling effectively online.
“Across Vermont, everyone has been in an incredible nonstop dance for nine months, a dance of taking one step this way and taking another step another way, a perpetual motion for organizations as they adapt day to day,” said Jody Fried, the executive director of Catamount Arts in St. Johnsbury. Fried said he listens to the governor’s twice-weekly Covid-19 press conferences for guidance on the changing safety rules for businesses and nonprofits. Most indoor performance venues have been dark since March.
“It’s not over,” Fried said of the dance. “The winter will be this way.”
Contradictions everywhere
As an economy that relies more heavily than most on tourism, Vermont has been particularly hard-hit by its own travel restrictions (which now require a quarantine for anyone visiting the state) and by Gov. Phil Scott’s very decisive action in mid-March, when he shut down bars and restaurants to all but takeout service and ordered many businesses to cease operating altogether.
Vermont was the only state that actually halted all non-essential business, said Matt Musgrave, the deputy executive vice president at Associated General Contractors.
But Vermont also had an advantage over other states thanks to a “small state minimum” built into the federal CARES Act, which sent out billions of dollars in stimulus money. With a $1.25 billion share of that money, Vermont’s per-capita take was exponentially larger than that of most other states, enabling lawmakers to direct more than $300 million in grants to businesses to help them stay open. Where in some states, individual business grants topped out at $10,000, hundreds of Vermont companies have received grants of up to $300,000.
And while many places, including New York City, are reporting an avalanche of restaurant closures, that doesn’t seem to be happening in Vermont. Economic Development Commissioner Joan Goldstein credits the business grants.
“We have more money per capita, and we have saved a lot of businesses,” she said.
A complex reading of economic indicators
The large infusion of federal money also shows up in the monthly report of the Joint Fiscal Office or JFO, which in December showed that general fund revenues were up nearly 10% over target for the first five months of the year, and up 19% over target in November.
State officials have attributed at least part of the increase to the CARES Act money, which flowed to an array of state agencies and programs. In all, Vermont has seen $4.8 billion in federal pandemic assistance since March, some in the form of the $600 weekly unemployment insurance payments paid through July, and through the stimulus checks sent out last spring to individual Vermonters.
Online sales tax revenues also doubled between March and September as Vermonters shifted to online shopping.
The state’s unemployment rate has barely budged from the all-time low that it had settled at before the pandemic began, but that, too, does not present a clear picture of what is happening for individuals and at businesses. Department of Labor Commissioner Michael Harrington said in December that the pandemic has put about 20,000 Vermonters out of work.
Another popular economic indicator is the housing market, which in many areas of Vermont is booming despite the national and local job loss and uncertainty about the future. There is some data that shows out-of-state buyers are moving into the state in greater-than-usual numbers. The December JFO report said that property transfer tax revenues were $1.3 million above target for the month of November and are now almost $4 million, or 60%, above target for the first five months of the year.
A time to adapt, wait, and hope
In human terms, the nine-month crisis means that individuals, contractors, business leaders, and employees have been adapting, and adapting again, as conditions have changed. Large manufacturers swiftly changed course in the spring to start making personal protective equipment, masks, and even ventilators as the Covid-19 infection rate surged.
Chroma, an optical equipment company in Bellows Falls, hired new workers and ramped up production of technology that is used in Covid-19 tests.
Red Hen Bakery in Middlesex closed its newly renovated indoor café and installed a pair of take-out windows to serve customers. In the summer, it fired up its outdoor pizza oven in a large open space behind the restaurant and invited bands and a brewery. The business is down 10% over last year, which co-owner Randy George considers a triumph. He says he’s luckier than most.
“We’re prepared for a long, tough winter,” he said. “We don’t have any illusions this is going to be easy anytime soon.”
Catamount Arts teamed up with Burke Mountain Resort to hold a live concert in October with Kat Wright and Brett Hughes, viewed by a small and distanced audience on the patio and by customers who paid to watch from hotel room balconies.
The concert’s 150 tickets sold out well in advance. But without space restrictions, Catamount would have sold 800 tickets, said Fried. He said the organization has survived on money from the Paycheck Protection Program, the state grants program, and some of its regular funders.
Vermont’s hospitality business, generally acknowledged to be the hardest-hit sector, has formed an 80-strong interest group and hired the lobbying firm DRM to help draw in as much state funding as possible.
While commercial construction slowed in 2020, home builders and contractors are working overtime as Vermonters — like their counterparts around the country — built new homes or undertook renovations in 2020. Meanwhile, despite the slump in commercial construction work, membership in Associated General Contractors grew 10% to 15%, said Musgrave.
Many business owners think the adaptations, the online marketing, and the streamlining will position them better in the long run. But they also say they’re exhausted with the constant change and long-term uncertainty.
“There’s this universal level of fatigue,” said Fried.
