The Center for Economic Development Assesses the Impact of Covid-19 on the Economy
The Center for Economic Development has released a new research brief that examines the state of the economy in the U.S. and Northeast Ohio pre-pandemic and provides an analysis of the immediate impacts of the social distancing measures and mandated closures that occurred as the COVID-19 pandemic spread. This new evidence shows that the Northeast Ohio economy was headed for an economic slowdown even before the COVID-19 pandemic emerged.
“The economic repercussions of COVID-19 effects all people, businesses, governments and organizations, and will have long-lasting effects on our community,” Dr. Iryna Demko, one of the authors of the report shared. “While the actual impact will not be known for some time, it is my hope this research will provide policymakers with better data to address the real challenges we are already facing.”
With the Governor’s stay-at-home order, many businesses were forced to close, causing a spike in initial unemployment claims from workers who were furloughed or laid off. In Northeast Ohio alone, over 1 million people have filed first-time unemployment claims since mid-March, with the most affected industries being auto manufacturing, entertainment and arts, accommodation, and food services.
Additionally, with low revenue and high unemployment, there has been a significant decline in consumer spending, with the Index of Consumer Spending dropping 18 points in April alone. This decline is particularly concerning given that consumer spending accounts for the majority of GDP growth in the U.S.
The brief argues that as the economy gradually reopens, the workplace will look different due to continued social distancing measures, including masks, temperature checks, and frequent sanitizing. These changes may reduce the use of certain services due to safety concerns or lead to some industries, such as concerts and sporting events, taking much longer to reopen fully.
“Overall, the culmination of these impacts may cause a larger and longer slowdown, resulting in a lengthy recovery,” Demko adds.
This research was conducted with support from the George Gund Foundation and the U.S. Economic Development Administration. The brief, From Economic Slowdown to Recession, was released by CSU’s Center for Economic Development earlier this month.