PPP blunts economic impact of pandemic

The pandemic is having an effect on the Washington County economy but was blunted by the CARES Act's Paycheck Protection Program (PPP). In addition, because one quarter of the population receives Social Security benefits of one kind or another, the economy has been more stable than might be expected.
Charles Rudelitch, executive director of Sunrise County Economic Council (SCEC), opened with the news at a virtual meeting held on October 30 to discuss the pandemic's economic impact on the county. However, he was quick to add that the aging demographic that is or would be reliant on Social Security had long term implications for the health of the county's labor force and that the county "is one of the more distressed counties in Maine" when it comes to poverty level. "Households with female single moms are almost 50% at poverty level" and are particularly vulnerable, he said.
The Washington County economy has an annual output of between $1 and $1.2 billion. "A big part of the economy is transfer payments," which are the largest section of growth, Rudelitch said. Transfer payments include Social Security, disability, retirement pensions, medical benefits, SNAP and TANF, veterans' benefits, unemployment, PELL grants and more.
The two rounds of CARES Act funding "largely benefited local payroll and businesses" in the first and second roll outs, Rudelitch said. The micro enterprise grants also helped, but at a much lower level. He explained that about $1 million came to the county in the form of the micro enterprise grants as opposed to about $50 million "that flowed in with the PPP." He stated, "At least to date the federal stimulus payments have blunted the impact for many households." He added that the fading impact of the payments may mean widespread hardship in the late winter, but if more stimulus funds are distributed "then it's possible that many households will get through the first half of the year in better shape."

Job sectors and economic impacts reviewed
The local economy is divided roughly into six areas, with the two largest being "other" at 3,500 and education and healthcare with 3,400 jobs. Rudelitch clarifies that the "other" category, as defined by U.S. Census from 2018, includes employment such as transportation and warehousing, utilities, wholesale trade, information, finance and insurance, real estate and public administration.
Next up at 1,600 is agriculture, forestry, fishing and mining, with Rudelitch noting that over 1,000 of those jobs are in the lobster fishery. Retail trade is at 1,300 jobs, manufacturing at 1,000. Tourism, recreation, the arts, lodging and food service are at a little over 800 jobs, as are those working in construction.
Job loss could be at risk in the seafood fishery given the decline in demand from resorts, cruise ships and other high end markets for lobster, scallops, salmon and more. About 500 jobs in the food service industry at local restaurants are "particularly vulnerable" because of the pandemic. Hospitals, too, are financially vulnerable because of the decision to postpone elective procedures, which are an important revenue stream.
"A massive amount of the [Baileyville] mill's output is part of the $1 billion county economy," Rudelitch said. While the mill is private and the numbers not public, much of the mill's economic output of pulp product can be tracked through the Port of Eastport's shipping numbers. However, Rudelitch explained that when the mill's tissue plant went online, trucks began to be used to transport the tissue product, and those numbers can't be quantified. But given the numbers that are out there to analyze, the mill, he suggested is doing fine. The forestry industry is holding steady, with the start of a rebound in the softwood market, of particular importance to family woodlot owners in the coastal wood plain. Hardwood still dominates the market.
The blueberry industry "is under extreme stress," Rudelitch explained. Two major companies and many small family farms are affected, but the bright spot is in frozen berries, which continues to be a stable market.
Other bright spots are the real estate market and construction trades. "Something unique is happening," said Rudelitch. Homes and land are selling at record pace to people from out of county and out of state who are looking for a new lifestyle given the pandemic's impact on cities and more congested parts of the country. Contractors in all building trades are being employed to renovate and repair existing homes and build new ones. The two biggest questions that remain on the table are how many of these new homeowners will end up staying year round and how many will have children attending local schools.
High quality broadband access could play a significant role in attracting and retaining residents, Rudelitch noted. SCEC is working with other entities in the state to identify areas in the county that need assistance in obtaining such services. "The pandemic showed the importance of access to broadband. It unlocks career training and in migration if we have dependable, state of the art" IT [information technology]. The pandemic also showed "how education could have been enhanced." He added, "It's incredibly important," with the digital equity issue clearly illustrated in the spotty K 12 infrastructure and technology access to help with remote learning for area schools. It's not just an issue of having it, Rudelitch pointed out. It's also an issue of affordability.
A surprise finding was the inbound traffic at the U.S. and Canadian border, with commercial trucking not showing as much of a dip as expected. The retail market in Calais also seemed to be healthier than expected. However, Rudelitch noted that because of Walmart's presence it is hard to know how much of the retail trade is taking place there versus at smaller retail shops. He was concerned about the long term implications of shopping online and what that could mean for local retail stores.
Looking at critical elements that need to remain healthy for the county to stay economically viable, Rudelitch ticked off general infrastructure such as broadband that can support a wide range of economic activity and some sectors utilizing natural resources such as prepared and canned food. "The food industry as a whole looks to be a sensible area." Anchor institutions such as the two hospitals and the Federally Qualified Health Centers, the two higher education institutions of University of Maine at Machias and the Washington County Community College and the K 12 educational systems are all critical to the county's health. "Finding ways to support and maintain capacity -- they're essential if we want to attract people to move here and for people here to maintain their health and plan and implement careers."