Understanding Rapidly Changing Business Conditions During COVID-19 Using the Richmond Fed Business Panel
Jason Kosakow and Sonya Waddell, Federal Reserve Bank of Richmond
The views and opinions expressed herein are those of the authors. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.
The COVID-19 pandemic sharply altered economic and business conditions in the United States. Demand for goods and services shifted, supply chains were disrupted, and uncertainty was abundant. The Richmond Fed, like many organizations and agencies, relies on multiple data sources to understand economic conditions. However, sources of real-time data on changing conditions were limited.
Thus, the Richmond Fed decided to append special questions to the end of our survey of manufacturing and non-manufacturing businesses to get real-time information about timely economic questions. Overall, survey panelists responded positively to the addition of the special questions. Survey response rates held-steady, and panelists commented that they enjoyed the special questions as it gave them a sense of what the Richmond Fed was thinking about regarding economic conditions.
Below are a few highlights from our special questions that were relevant to the rapidly-changing economic landscape.
There was much uncertainty about the health of the business community in the early months of the pandemic. We asked a series of questions assessing how long firms’ think they could stay in business under the COVID-19 economic landscape. We learned that 60 percent of firms expected to last for the next six months. This information highlighted the severity the COVID-19 pandemic had on businesses.
Firm Expectations on Office Reopening (May 2021)
COVID-19 forced business to convert their onsite employees to remote workers. Many companies piloted return-to-office policies before fully allowing all workers back. These special questions provided information on firms’ voluntary return-to-office policies. Return to office was particularly relevant to downtown economies, which struggled during the pandemic.
Firms Struggle to Meet Demand Due to Tight Labor Market (February 2022)
Before COVID-19, nearly all firms in our survey were able to meet demand for their goods or services. Two years into the pandemic, only 73 percent of firms reported being able to meet demand. The primary driver behind firms’ inability to meet demand, as discovered by our special questions, was a lack of available labor.
Firms Increase the Frequency They Adjust Prices (March 2023)
Fifth District firms reported increasing the number of times they adjusted the prices they charged their customers compared to before the pandemic. Firms are often reluctant to make multiple prices changes in a year, and this set of questions highlight how firms reacted to increased inflationary pressure.
These are only a handful of topics covered. To read more about the work the Richmond Fed is doing, you can visit our Regional Matters blog.