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July 20, 2024

New headwinds expected for Illinois businesses tossed by pandemic storm

Businesses in Illinois are starting to stabilize after the pandemic, but that doesn’t mean smooth sailing, according to business advocates.

It’s not quite business as usual for Illinois businesses recovering from the pandemic – Illinois is still missing 178,300 jobs compared to January 2020 by the U.S. Bureau of Labor Statistics’ last count – but things are getting closer.

Todd Maisch, president of the Illinois Chamber of Commerce, said businesses are still working out of disruptions.

“[They are] still looking to replace some valued employees that they lost during the pandemic, and probably working out from under some heavier debt load than they typically had in the past, but I think to say that we’re getting closer to a stabilization is a reasonable statement to make,” he told The Center Square.

Maisch said while direct demand of the COVID-19 recession has stabilized, new headwinds have emerged.

“Higher interest rates and inflation, which everybody is talking about; the labor market, while improved, is still tight,” he said.

The rise in interest rates is really just a return to normal rates, but it is bad news for businesses that took on more debt to make it through the pandemic, Maisch said.

The current hot topic, inflation, isn’t going anywhere anytime soon either.

“This is where the high cost of goods and obtaining goods, energy prices and a tight labor market are all exacerbating cost increases that employers can’t absorb anymore and are having to push on to their customers,” he said.

Maisch expects inflation to persist for a while. The hope now is that the Federal Reserve will be able to negotiate a soft landing by pushing up interest rates enough to dampen demand without pushing the economy over the edge into recession, he said.

Businesses are by no means out of the woods yet.

“If you have these higher gas prices persist for a period of time, that’s going to be another competition for families’ dollars when it comes time to deciding to go out to eat or go on a family vacation,” he said.

Illinois’ recovery is ranked 12th worst in the nation, with leisure and hospitality taking one of the biggest hits, according to a Daily Herald op-ed by Illinois Policy Institute’s Matt Paprocki.

Roughly 200,000 businesses nationally closed their doors over the pandemic.

While that number of lost employers is nothing to sniff at, Maisch pointed out it is not as bad as expected. He gave credit to the helpfulness of some government programs.

“It speaks to the effectiveness of some of the government programs that allowed businesses to stay in business until things could stabilize,” he said.

This article was originally posted on New headwinds expected for Illinois businesses tossed by pandemic storm

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