New River Valley, VA – In May 2022, Onward New River Valley partnered with the New River Valley Regional Commission, through a grant from the U.S. Economic Development Administration CARES Act, to conduct surveys of technology and manufacturing companies in Virginia’s New River Valley. Onward New River Valley engaged the Virginia Tech Center for Economic and Community Engagement for research assistance with the surveys. These surveys were a follow-up to surveys originally conducted in September 2020. The goal of both the original and follow-up surveys were to better understand how the COVID-19 pandemic affected technology and manufacturing businesses throughout the region as well as to gain knowledge about common challenges that these companies are facing.
Survey responses were collected from both the tech and manufacturing sectors during May 2022. Each sector was given a two-week response window. The survey was sent to 33 tech companies and 37 manufacturing companies throughout the New River Valley (NRV). 55% of tech companies who were sent the survey responded while 41% of manufacturing companies responded.
The survey results revealed insights about the current state of the NRV’s manufacturing and tech sectors when compared to before the COVID-19 pandemic as well as to the mid-pandemic survey conducted in September 2020. A synopsis of these insights for both sectors, including information about the operating status, employment trends, remote work trends, and current industry challenges, is included below.
The data from the original and follow-up surveys show that the current operating status of both tech and manufacturing companies in the NRV have held steady or improved over the past two years.
Manufacturers in the NRV are operating at strong levels and have successfully weathered the effects of the COVID-19 pandemic. In the survey conducted in September 2020, over three-fourths (76%) of respondents reported operating at or above pre-pandemic capacity. The results of the follow-up survey in 2022 indicated that all responding manufacturers were operating either at (92%) or above (8%) pre-pandemic capacity. No respondents reported operating below pre-pandemic capacity. This shows that manufacturers throughout the region are operating at normal levels when compared to their operations prior to COVID-19 and have improved their operations compared to the height of the pandemic in 2020.
Tech companies in the NRV are operating at stable levels compared to before the pandemic. The original survey results from 2020 reported that the vast majority (88%) of tech companies indicated their business had grown (38%) or stayed about the same (50%) when compared to pre-pandemic. For the 2022 follow-up survey, half of respondents (50%) reported that their firms have grown relative to pre-pandemic levels while nearly one-third (28%) reported maintaining their size. Thus, a larger percentage of tech company respondents reported that their businesses were growing in 2022 than did in 2020. Overall, the percentages of NRV tech companies that report either remaining steady or growing compared to pre-pandemic levels has remained relatively stable over the past two years.
The number of employees at NRV tech and manufacturing companies has only increased in the nearly two years since the first survey was conducted in September 2020. The original survey results revealed that approximately two-thirds (63%) of tech company respondents said that their number of employees had stayed the same since pre-pandemic. A similar amount (62%) of manufacturers said the numbers of employees remained the same or increased at that time.
In contrast, the follow-up survey in 2022 showed that the large majority (83%) of tech company respondents and three-quarters (75%) of manufacturing survey respondents reported maintaining or increasing their number of employees when compared to pre-pandemic.
While the original surveys showed that employment in the tech and manufacturing industries across the NRV remained mostly stable in the middle of the pandemic when compared to pre-pandemic levels, the follow-up survey results show an increase in the percentage of tech and manufacturing companies across the region who are reporting employment numbers similar to or greater than before the pandemic. This shift could indicate that companies across the NRV are beginning to rehire positions eliminated when the pandemic began.
The number of the open jobs in the New River Valley is continuing to grow. In the 2022 follow-up survey, the large majority (82%) of manufacturing respondents and over half (56%) of tech company respondents reported having unfilled job openings in the NRV. This is a notable increase from the 2020 survey where only 62% of manufacturing respondents and 38% of IT/tech respondents reported having unfilled openings. The increase could be attributed to an increase in hiring due to companies’ growth across the region, the current U.S. labor market that is making it harder to fill open positions, or a combination of both factors.
Remote Work Trends
Remote work trends for tech and manufacturing companies in the NRV can be described as the tale of two sectors. While the data from the 2022 follow-up survey shows a continuation of remote work for tech companies, it also shows that manufacturing companies across the region have returned to mostly in-person work.
In the original industry surveys conducted in September 2020, two-thirds (67%) of tech company respondents reported that more than 81% of their employees were working remotely at the time. In the 2022 follow-up surveys, only one-fourth (24%) of respondents reported that over 81% of their employees would be working remotely currently and in the future. However, nearly half (41%) of the follow-up survey respondents reported that 61-80% of their workforce would be working remotely in 2022 and beyond. Over three-quarters (78%) of 2022 tech survey respondents said that remote work would continue to be very relevant to their firms’ operations in the future. Overall, this shows that tech companies in the region still are utilizing remote work to a large extent and will do so moving forward, but that the percentage of employees working remotely in 2022 has decreased when compared to 2020. This could indicate an increase in hybrid work options for NRV tech companies.
In contrast, NRV manufacturing companies have relied less on a remote workforce throughout the pandemic compared to tech companies and continue to do so in 2022. This difference can be attributed to the nature of manufacturing businesses and the need for in-person production operations. In September 2020, nearly two-thirds (62%) of manufacturing survey respondents reported having more than 5% of their workforce working remotely, but almost none (5%) of the respondents reported that percentage of remote workers prior to the pandemic. However, the increase in remote work in the height of the pandemic allowed manufacturers to properly address physical distancing guidelines and health and safety concerns for their employees.
The number of manufacturing survey respondents reporting remote work for their employees decreased in the 2022 follow-up survey. In the current survey, only one-third (33%) of manufacturing respondents anticipated that they would have more than 5% of their workforce working remotely in 2022 and beyond. This shows that remote work for NRV manufacturers has decreased when compared to the height of the pandemic and that manufacturers anticipate remote work will be less relevant to their businesses in the future than in was in 2020.
While manufacturing and tech companies in the NRV have weathered the COVID-19 pandemic with strength and stability, both industries are also facing current challenges that were highlighted in the survey results.
Issues surrounding the supply chain have come to the forefront as some of the most pressing challenges NRV manufacturers are currently facing. In the 2022 follow-up survey, nearly all (91%) manufacturing survey respondents noted a decrease in availability of inputs and raw materials when compared to pre-pandemic. These decreases in availability corresponded to higher costs and expenses for manufacturing companies. Three-fourths (75%) of respondents noted that there was either a slight or substantial increase in the cost of those inputs and raw materials and the same percentage noted an increase in supplier lead times when compared to before the pandemic. Additionally, nearly all respondents noted a slight or substantial increase in freight costs (91%) and overall expenses (92%) for their businesses.
The challenges currently faced by NRV tech companies center around the changes associated with remote work becoming a long-term solution for these businesses. In the 2022 survey, the most frequently reported challenge among tech company respondents was employee morale and company culture. With the increase in remote and hybrid work over the past two years, it makes sense that companies may find it challenging to establish and nurture a positive company culture for their employees. Another challenge facing NRV tech companies is the reduced need for physical office space because of increased remote and hybrid work options. Two-thirds (67%) of tech company respondents reported that their company’s needs for physical space have changed because of the pandemic. Many of those respondents noted that they needed less office space than before the pandemic due to the increase in remote work.
Overall Industry Outlook
In both the original and follow-up surveys, manufacturing and tech companies responded to a question about their overall business outlook in the NRV over the next 6-12 months. In 2020, the vast majority (91%) of manufacturing respondents reported a steady or positive outlook over the upcoming year. In contrast, a slightly smaller number (81%) of manufacturing respondents reported a steady or positive outlook for the same time frame in the 2022 follow-up survey. While the survey was not able to identify a clear reason why manufacturers have a slightly less positive outlook now than they did in September 2020, the supply chain issues highlighted above may be a contributing factor.
Meanwhile, tech company respondents shared a very similar outlook for their businesses in both the 2020 and 2022 surveys. In 2020, the vast majority (88%) of respondents reported a steady outlook for their businesses in the NRV over the next 6-12 months. This closely mirrors the 89% of tech company respondents reporting a steady or positive outlook over the next year in the 2022 follow-up surveys.
The results from the original and follow-up surveys conducted by Onward New River Valley and the Virginia Tech Center for Economic and Community Engagement show that both the tech and manufacturing industries in the region have shown resilience throughout the COVID-19 pandemic. NRV manufacturers and tech companies continue to be successful in Virginia’s New River Valley and are strong contributors to the region’s economy.
Learn more about the follow-up survey and read a final report of the results from the Virginia Tech Center for Economic and Community Engagement here.
Onward NRV: Onward NRV is a public/private, regional economic development organization whose mission is to attract and retain world class jobs, investment, and talent in Virginia’s New River Valley. It’s also a movement where leaders from business, government, and higher education work together to promote the economic vitality of the region.
Virginia’s New River Valley: Virginia’s New River Valley is an eclectic mix of interconnected small towns that each offer their own unique vibe and appeal. The region provides an abundance of cultural and social offerings due to the presence of three world-class universities, while retaining the charm and benefits of small-town living. The NRV is home to a diverse and innovative business community with companies that range from high-tech startups to foreign-based corporations to specialty agribusiness. These organizations benefit from the collaborative spirit of our region and a loyal, highly skilled, and educated workforce. The scenic beauty of the region also fosters a deep connection to nature, which is deepened by access to outdoor recreation and the preservation of our natural environment. It’s clear why Virginia’s New River Valley is “A Natural Fit.”