For Virginia Robertson, owner of the Main Street Wine Bar in Stahlstown, the beautiful weather has been the saving grace of the pandemic. In preparation for her June 11 reopening, she moved more dining tables to the patio outside her small restaurant and rehired every staff person. She has been turning away business ever since.

As a result, Main Street Wine Bar had its best summer ever. “If it had rained like last summer I probably would have closed because 25% indoor is not worth opening,” says Robertson. “Everyone wants to eat outside and I have a big patio.”

While she’s grateful for that break, she’s nervous about the near future. “This weekend will be the tell,” she says, with cold weather predicted. “I’m really scared for winter.”

The Main Street Wine Bar is like most businesses in PA which had to adapt in many ways to the Covid crisis. Robertson was typical in securing a Paycheck Protection Program (PPP) forgiveness loan which allowed her to stay afloat. And while she enjoyed a good summer, she’s not back to normal for the fall when seating is capped at 50% indoors.

Only four in 10 owners say their businesses are operating normally now since the pandemic hit, according to a semi-annual survey conducted by PNC of small and midsize business owners. In response to the crisis, nearly half (46%) operated with reduced capacity, four in 10 (41%) reduced hours of operation and three in 10 (30%) were closed at least part of the time.

Nearly half report a decrease in sales (47%) with 16% reporting sales dropped by more than half.

On the other hand, more than one in 10 (14%) businesses report an increase. And nearly all had to adapt to the crisis as the chart below reveals.

Long-term effects 

A majority (58%) say the business environment will continue to be challenging in the next six months. Three-quarters (76%) expect that the situation won’t return to normal by then, while three in 10 (31%) don’t ever expect a return to normalcy.

Expectations for the next six months compound the impact workforces have already experienced, says the report. The survey revealed the second-lowest number of businesses in the 14-year history of the Pennsylvania survey expecting to increase hiring (8% vs. 15% a year ago) and a new low for those expecting to increase employee compensation (14% vs. 30% a year ago).

Nearly all who applied for a PPP loan consider the funding important (98%), and more than eight in 10 (83%) say it is extremely important. Of those who applied, eight in 10 (80%) were approved. A majority (58%) say additional government stimulus funding is important for their business, with more than four in 10 (42%) indicating it is extremely important.

PNC Chief Economist Gus Faucher said the bank expects a strong economic recovery in Pennsylvania through the rest of 2020 and into 2021. “Consumers will spend more as the state continues to lift restrictions, and very low-interest rates will support business and household borrowing. A strong housing market will be a key driver of near-term growth. The unemployment rate will continue to fall, although Pennsylvania job growth will slow from its current rapid pace. Risks to this outlook are weighted to the downside. These include a worsening of the pandemic and the reimposition of stay-at-home and business closure orders, a large increase in business failures and an inability of the federal government to provide further stimulus to households and businesses.”

Faucher considers the Pennsylvania economy to be in the initial stages of recovery from what he calls the Viral Recession. While the crisis led to unprecedented job losses, economic activity in Pennsylvania has picked up since then, although it remains well below its pre-pandemic level. “One-time stimulus payments and expanded unemployment insurance have boosted household incomes, allowing consumers to increase their spending as businesses have reopened. With the economy recovering, job growth has been very strong; the Pennsylvania unemployment rate fell from 16.1% percent in April to 10.3% in August, although this is still far above the 4.7% rate in early 2020.”