Coronavirus takes major toll on Arizona businesses

By virtually all  accounts, the U.S. economy had been going like gangbusters. Unemployment was at record lows – below 4% for all but one month in 2019, according to the Bureau of Labor Statistics – earnings were gaining grounds after years of stagnation and consumer sentiment was through the roof. Indeed, in the fourth quarter the Conference Board's Global Consumer Confidence Index reached 107, it's highest-ever reading.

Then the coronavirus happened.

Believed to have originated from Wuhan, a highly industrialized city in China, COVID-19 has caused extraordinary levels of instability across the country. Millions of Americans are either furloughed or have lost their jobs completely. Entire industries, including restaurants, hotels, airlines and retail, are struggling to stay open with public gatherings of more than 10 people prohibited.

While some cities and companies appear to be rolling with the punches better than others, small-business owners in Arizona have experienced a significant body blow.

As reported by the Arizona Republic, Arizona experienced job growth on a year-over-year basis for a remarkable 112 months in a row. In fact, some of the most consistent industries in jobs added were hospitality and retail. Now, these same sectors in Arizona are in crisis mode, forcing business owners large and small to lay off new as well as tenured employees.

Forecast: 1 in 4 out of work in hospitality and retail
As a result, a state that had among the lowest levels of joblessness will likely see a significant jump, potentially above 25% for leisure hospitality and retail, based on estimates from the Economic Policy Institute. Among all private sector industries in Arizona, the job losses could surpass 279,700.

Lee McPheters, an economics professor at Arizona State University, told the Arizona Republic the impact on businesses and staff is nothing short of devastating, especially compared to where the state was in terms of economic vitality.

"We had one of the best economies in the country," McPheters noted. "We were certainly one of the top 5 economies in the country."

McPheters predicted that just about all of the job gains Arizona experienced since early 2018 will likely be wiped out as a result of the coronavirus pandemic.

These widespread work stoppages may prevent many small businesses from reopening, given they have ongoing costs and limited cash flow to pay them off.

We're here for you
These are highly challenging and unpredictable times. We'll all get through it though, and at Hudspeth Law Firm, we want to assure you that we're here to help you manage the fallout. Whether you're wondering what your options are or need a specific service, your business is our business. As Arizona business attorneys, we will do everything within our power to help you get back to business as usual. Contact us today.  

Categorised in: Business Law, Dissolution & Partnership Disputes, Dissolving a Business, Starting a Business in Arizona

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