By SU Public Relations
SALISBURY, MD—Eastern Shore business owners and managers are less optimistic of the economic future than they were six months ago.
These trends are among the findings of the latest Eastern Shore Business Sentiment Survey conducted through a partnership with Salisbury University’s Business Economic and Community Outreach Network (BEACON), SU’s Eastern Shore Regional GIS Cooperative (ESRGC), and many of the region’s economic and workforce development professionals.
The December 2023 results represent the sixth report released by BEACON. The first survey in the series was conducted in June 2021, with subsequent six-month follow-ups, and the most recent report in June 2023.
The survey included more than 50 questions, asking business leaders to weigh in on a range of topics, from general business concerns to conditions in their own industries. Respondents evaluated business conditions locally, regionally, in the state and nationwide for the coming year. They also shared views related to their specific industries and on issues from labor supply to regulations.
Results include:
• The 12-month outlook for business conditions in participants’ respective counties is significantly better than in December 2022. When asked to predict the business conditions in their counties and the Eastern Shore, 28% responded that they believe economic conditions will worsen, compared to 38% in December 2022. Those responding “Much Better/Better” increased by 2 points over 12 months. On a state and national level, 44% of participants believe economic conditions will be worse, compared to 52% in December 2022.
• Expectations for business conditions locally declined from June 2023 to December 2023. “Much Worse/Worse” responses increased from 25% in June to 28% in December. “Unchanged” responses increased to 45% in December 2023 after being 41% in June 2023, and “Much Better/Better” responses decreased significantly to 27% from 35% in June 2023.
• Reflecting on their individual industry sectors, 51% of respondents believe business conditions “Deteriorated A Lot/Deteriorated Slightly” over the past 12 months. Respondents are pessimistic about the short-term future, with only 18% believing business conditions in their sector will “Improve Slightly/Improve A Lot” over the next three months. Respondents are also pessimistic about the long-term future, with 43% believing business conditions in their sector will “Deteriorated A Lot/Deteriorated Slightly” over the next 12 months.
• Respondents assessed inflation as the most significant barrier to expanding their sector, followed by labor force issues then regulations. The highest barrier to starting a new business in their specific sectors was labor force issues, followed by inflation and finances and funding.
• When asked which cost increase in the previous six months had the greatest impact on the respondents’ businesses, they noted that the increase in insurance had the highest impact. Close behind, the costs of payroll and benefits and fuel and transportation had the second and third greatest impact, respectively.
• Respondents agreed payroll and benefit costs in the next 12 months would be worse or much worse in their county, region, state and nation. “Worse/Much Worse” responses increased in the county, region, state and nation when compared to the June 2023 survey.
• Businesses generally are confident about their operation on a longer horizon. Over 80% believe their firm will be operating locally in the next five years, with just 7% predicting their business will not be operating locally five years from now.
• Even after the events of the COVID-19 pandemic, a majority of respondents’ firms do not have remote workers (68%). Of the firms with remote workers, the majority of the workers were in the county in which the business is located.
• Some 79% believe household income for the average American has fallen behind the cost of living, while only 2% believe household incomes have surpassed the cost of living.
• Respondents were increasingly optimistic in their expectations of the standard of living in the next five years on the Eastern Shore, while increasingly pessimistic on the state and national level. Across all areas, 43% believe it will remain the same, while 35% think it will rise, and 22% think it will fall. The number of respondents that said that the standard of living would rise in Maryland over the next five years decreased by 10 points since the June 2023 survey.
• Participants had mixed views on the current state of America’s economy, with overall thoughts improving. Participants generally believe the economy is “Growing Rapidly/Growing Slowly” (42%), with 31% believing it is “In a Recession/Depression.” Some 27% believe the economy is “Stagnating,” which is a significant decline from 36% six months ago.
• A majority of responses came from company leadership, with business owners, presidents, CEOs and managing partners making up 72% of the participants. A total of 75% were from firms with fewer than 50 employees. Responses came from a wide variety of industries reflecting the economy of the region, with many respondents active in more than one industry.
Counties on the Eastern Shore will continue to conduct the survey every six months, with the data used to identify challenges facing the region, to assist in long-term planning and to guide the development of public policy.
The Eastern Shore Regional GIS Cooperative (ESRGC) summarized the findings in infographics that can be found on the Eastern Shore Economic Recovery Project website, but economic developers also have access to an internal dashboard that enables them to mine the data for insight on specific issues.
Designed to gauge the opinions of the region’s business leaders, this survey is one of the tools that has grown out of the Eastern Shore Economic Recovery Project, a venture made possible by grants totaling $507,000 from the U.S. Economic Development Agency (EDA). The Mid-Shore Regional Council and the Tri-County Council of the Lower Eastern Shore are recognized as Economic Development Districts by the EDA.
The data tools used in the project have been recognized with regional and national accolades including the Maryland Economic Development Association’s 2022 Economic Development Program Award, the 2022 International Economic Development Council Silver Award and the 2022 National Association of Development Organizations (NADO) Aliceann Wohlbruck Impact Award.
In addition to the regional councils, partners in the project include ESRGC, BEACON, the Lower Shore Workforce Alliance, the Upper Shore Workforce Investment Board, and the Caroline, Cecil, Dorchester, Kent, Queen Anne’s, Talbot, Somerset, Wicomico and Worcester county economic development offices.
To access Eastern Shore Economic Recovery Project data, visit https://recovery.delmarvaindex.org. The complete Delmarva Index can be found at https://delmarvaindex.org.
For more information visit the BEACON webpage and the ESRGC website.
Learn more about SU and opportunities to Make Tomorrow Yours at the SU website.