Business owners surveyed by the Downtown Long Beach Alliance this year expressed less optimism about the growth of the Long Beach economy than they did in previous years.

While most business owners still expressed optimism for the future, according to the association’s 2021 Economic Profile, only 64% of business owners said they were confident that the local economy would expand over the next year, compared to 78% the year before.

“Although we are starting to see improved health and economic outcomes from the pandemic, I believe the recovery process to reach pre-pandemic operation levels will take some time,” Kraig Kojian, president and CEO of the Downtown Long Beach Alliance, said in an email. “A number of business owners are more cautiously optimistic about the coming year than in years past, and many are still working to dig themselves out of increased debt and losses from 2020.”

Many Downtown businesses were hit hard by the pandemic, which imposed restrictions on a number of sectors that are prominently represented in the area, such as restaurants, bars and personal care services.

Among food and hospitality businesses surveyed by the association in the fourth quarter of 2020, 83% reported that they had permanently laid off or furloughed employees due to revenue losses. Across all sectors, 712 businesses responded, with 55% reporting layoffs.

A more recent survey included in the report suggests that the situation may have improved since, with only 25% of business owners reporting that they still had less employees than they did at the same time last year. However, this survey had a smaller sample size of only 250 respondents.

Overall, a majority of businesses said they expected to maintain the same number of employees and 37% said they were planning to hire up over the upcoming year.

Staffing levels at office-based businesses were affected far less than those in the service sector, with many retaining employees who continued to work from home. According to the survey, many are expecting remote working arrangements to continue, with 42% of responding businesses saying they anticipate using a hybrid model of in-office and remote work.

A survey conducted by the association this spring found that a majority of employers said they did not expect to return to even a third of pre-COVID occupancy levels by the end of 2021, although that response was in part contingent on the availability of vaccines, the association noted in the report.

Some office workers have returned to Downtown already, but daytime activity remains far lower than before the pandemic. Rental rates for offices remained almost unchanged throughout 2020, but net absorption for this real estate sector was negative, meaning that more office space came onto the market or remained vacant than was leased up.

With fewer workers coming downtown and restrictions on ground-floor businesses as a result of the pandemic, retail vacancies have increased as well.

“Businesses may need to pivot to a more experience-based business model that attracts people to a physical location, in addition to building out e-commerce capabilities to expand their reach and sales,” Kojian said, adding that it will be the task of the DLBA, its partner organizations and local businesses to promote Downtown as a place worth spending time in.