Big Picture - May 2020 - 8

There were positive findings, as well. Although PSPs are facing significant challenges, most are riding out the storm for the moment.
For example, only 14 percent noted they had to temporarily close their business and less than one percent indicated their company went out
of business. A solid majority have been able to avoid layoffs. Moreover, some have risen to the needs of today (16 percent) and modified
production to focus on producing personal protective equipment (PPE).
Views regarding the CARES Act were mixed, however. On the positive side, 45 percent stated that it will help avoid layoffs by taking
advantage of the federal grants offered, and 42 percent believed that it will help their business. However, this was matched by:
* 39 percent who indicated this was only a start and more help will be needed
* 37 percent who were uncertain how this will affect their business
* 28 percent who did not believe help will come fast enough

Only 14 percent stated they will be able to get a short-term loan from their bank to hold them over. It turns out this concern was well
founded because the $350 billion earmarked within the Paycheck Protection Program was exhausted within two weeks, with the unintended
consequence of much of the funds not going to the small businesses who were the most in need.
Confusion over the CARES Act's impact appears equally strong as positive perceptions. Consequently, it is not surprising the coronavirus
has profoundly impacted capital expenditure intentions for 2020. With a strong 2019 behind them, half of those surveyed fully intended to
make equipment purchases and another 30 percent intended to purchase software. However, those calculations have been revised, with
only 8 percent indicating a firm intent to purchase equipment or software in the current environment.
Fortunately, Congress and the president agree this is only a start and more help will be needed. On April 21, the Senate passed a
$484 billion aid bill for small businesses, and it was signed into law on April 24. Help cannot come soon enough. When asked how long
their businesses can exist financially based on the current conditions, the mean response was 3.7 months. With any luck, the second
round of stimulus help will land in the right place and keep these companies in the ring long enough to help them see it through to the
other side of this crisis.

BIG PICTURE

May 2020

April Showers Bring May Flowers

The ISA Sign Industry Quarterly Economic Report (QER) expects "a tough second quarter of 2020."
End markets all face significant uncertainty, particularly as the shutdowns have impacted key
customer groups like retail and restaurants, according to the release.
The release also states "the [COVID-19] pandemic has sent the global economy into a deep
recession, which analysts expect will be worse than 2009. But it will bounce back well in 2021,
expanding at almost four percent."
The report was prepared in April 2020 and covers two supplier markets (printing and electrical/
digital signage) and two end markets (electric/digital signage and architectural signage); it also
forecasts commodities. The QER is compiled by IHS Markit and analyzes each segment of the
market upstream and downstream to allow users to stay current with evolving business conditions.
THIS RESEARCH CAN BE FOUND (FREE FOR MEMBERS; AT COSTS FOR NON-MEMBERS) AT SIGNS.ORG/QUARTERLYREPORT.

http://www.SIGNS.ORG/QUARTERLYREPORT

Big Picture - May 2020

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