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Businesses Are Facing Stop and Go as Cases Surge in Some States

Businesses are Facing Stop and Go as Cases Surge in Some States

(Bloomberg) -- On Thursday, Bonnie Morales told two people they were hired. Three hours later, she rescinded the job offers, as Oregon, where her restaurant Kachka operates, pressed pause on reopening amid a record surge of Covid-19 cases.

“Those things are terrible,” Morales said. “Thankfully we haven’t purchased any inventory.”

A resurgence of the virus in some parts of the country is creating fresh tumult for business owners. To reopen, they need to rehire furloughed workers and buy supplies in advance. But the states are making decisions on what to do by looking at case and hospitalization data often at the last minute, making planning impossible.

Businesses Are Facing Stop and Go as Cases Surge in Some States

Oregon’s Multnomah County, where much of Portland lies, was set to enter Phase 1 of reopening on Friday. But Governor Kate Brown decided to hold that back late on Thursday.

“Due to the lateness of the announcement last night I hope not a lot of businesses have been ramping up, bringing employees back or buying inventory -- things that come with costs,” said Anthony Smith, Oregon state director of NFIB, representing 6,000 small businesses in Oregon. “That could certainly cause some additional financial hardships.”

Oregon’s move to put the brakes on reopening plans serves as a cautionary tale for businesses across the country. From Arizona to Texas, Covid-19 cases are surging, and decisions on what to do vary widely by state -- which makes planning for companies operating in multiple states even tougher.

Businesses Are Facing Stop and Go as Cases Surge in Some States

Oregon isn’t alone. In North Carolina, state and local officials are monitoring the sharp increase in cases as it enters the third week of Phase 2. In Mecklenburg County, where Charlotte is located, officials say the move into Phase 3 on June 26 could be delayed, the Charlotte Observer reported.

As North Carolina’s governor pushed back on President Trump’s plans for the Republican convention in Charlotte over social distancing requirements, Florida’s governor has given no indication he’s going to follow suit. The event will now be held in Jacksonville. Cases in Florida have climbed by 9,483 in the past seven days. Oregon on Thursday hit its highest daily count of cases -- 178 -- since the start of the pandemic.

Large companies like Portland-based Columbia Sportswear Co. have found it hard to navigate a patchwork of advisories from across the globe, said Peter Bragdon, executive vice president at retailer. As of Friday, 134 of the company’s 147 U.S. stores were open. In the company’s home state, store operations depended on county, or whether they were located in malls or standalone buildings. The opening of one store that straddled county lines was delayed as the company determined which directives it should follow.

Most of the company’s corporate employees are working from home, with no end in sight. It’s carefully considering the outlook before coming back to work, and wasn’t surprised by the delay in Oregon.

Businesses Are Facing Stop and Go as Cases Surge in Some States

“We are focused on thinking it through,” Bragdon said on the question of when to return to the office. “Abnormal is the new normal,” he said.

Small businesses are even harder hit since they often run on a shoestring. While the vast majority of small businesses that applied for Paycheck Protection Program loans in Oregon got them, that only buys a little extra time, Smith said.

“We know that a month or two is probably the longest the majority of our members can hang on during the Covid-19 crisis,” Smith said. “We have to at some point get back to work.”

Time is of the essence for Morales, from Kachka, partly because of the weather. She was hoping to offer outdoor seating in the parking lot behind her restaurant during the summer months. She only has until October, when the rains starts.

“Every dollar that we’ve spend now is certainly the money we are going to wish we had in the fall,” Morales said.

©2020 Bloomberg L.P.