Umpqua Bank released its “Business Resiliency” survey, a nationwide study gauging the impact of the COVID-19 pandemic on the confidence and future of U.S.-based small and mid-size businesses. More than 1,200 leaders at companies were surveyed on how their businesses are responding and what they will need in the months ahead to navigate successfully through the once-in-a-lifetime global pandemic event.

“There’s no denying that the pandemic’s economic impact is deep and continues to be painful for businesses, but there is reason for measured optimism,” Tory Nixon, president of Umpqua Bank, said. “Small and mid-size businesses are showing resilience and ingenuity in the face of unprecedented disruption and uncertainty. Our research indicates that many have already made strategic pivots that in some cases have made them more competitive, and many more are preparing to pull all the levers at their disposal to emerge healthier, more efficient and better able to serve their customers in the long run.”

Survey participants came from businesses that weathered the initial economic shutdown but face continued uncertainty and are a primary audience for financial assistance through the federal Paycheck Protection Program. They represent a cross-section of U.S. enterprises that drive job creation and prosperity, including middle market companies with at least $10 million in annual revenue that contribute $6 trillion to the U.S. economy annually and employ 44 million Americans.

Investments in tech, automation accelerate to remain competitive

Even as a significant majority of mid-size companies delay or cut spending in several areas, including outside vendors, marketing and promotions, hiring and benefits, nearly five in 10 have increased spending on technology, digital transformation or automation. More than 80% of businesses have already begun automating or plan to automate tasks previously performed by workers, and 76% are exploring ways to digitize the customer experience. Although smaller businesses are less likely to have concrete plans to make these shifts, moving toward automation and digital customer experience still rank as two of the top priorities for 29% and 46% of small businesses, respectively.

Companies are making strategic shifts and pivots to adapt and reinvent their business

Mid-size companies in particular are making significant changes to lines of products and services, with 75% reporting they have or plan to do so. Roughly 30% of small businesses report a similar strategic shift. Nearly 80% of mid-size companies have already (17%) or are likely (61%) to make changes to their pricing model.

Remote work and an emphasis on new skills highlight the potential of long-term workplace changes

The U.S. workforce has experienced significant upheaval in recent months. According to the survey, some of the changes could have a long-lasting impact. Remote workplace, for example, could be here to stay, as nearly eight in 10 mid-size and almost 50% of small businesses are moving now and planning in the future to allow more employees to work from home. More than 60% of mid-size companies are also likely to replace current employees to add different skill sets, as well as move away from a traditional staffing model in favor of utilizing more contract workers.

Measured 12-month optimism is coupled with planning for expansion

Nearly seven in 10 businesses expect their revenue to remain stable (40%) or increase (29%) in the next year. Another 66% expect their profitability to remain stable (40%) or increase (26%) in the next year. Despite the challenging environment, roughly 70% of mid-size businesses are also thinking about expansion plans, with businesses in the western U.S. leading all other regions in planning.

Some businesses are stronger today and focused on positive, long-term changes

Although many businesses have been negatively impacted by the pandemic, not all businesses have been impacted adversely. Nearly a quarter of businesses reported a stronger competitive advantage. Another 41% said they’re adapting and making changes that will make them profitable and competitive long term.

According to Richard Cabrera, head of commercial and corporate banking for Umpqua Bank, there’s tremendous opportunity for financial institutions to continue rising to the occasion following the Paycheck Protection Program by providing tailored solutions that preserve cash flow and create efficiencies necessary to remain competitive in the current and post-COVID-19 economy.

“The stakes in the current economy are high, and the pandemic is clearly forcing companies to carefully consider key aspects of their business and go-forward strategy,” Cabrera said. “With the help of experts in banking and other professional services, many small and mid-size enterprises will emerge from this crisis looking and behaving very differently, which likely will contribute to significant shifts in the U.S. economy as a whole.”

The Umpqua Bank “Business Resiliency” report surveyed more than 1,200 decisionmakers at small and mid-size companies across the U.S. The online survey was conducted in partnership with DHM Research, a public policy and business research firm, and targeted executives at companies with $500,000 to $500 million in annual revenue. The survey has a 2.8% margin of error and was fielded from June 22 to July 7.