Economist Anirban Basu predicts that the recession during the COVID-19 crisis will be “short and vicious.”
Basu, president and CEO of Baltimore-based Sage Policy Group, was the keynote speaker during the 12th annual Greater Susquehanna Valley Chamber of Commerce’s Economic Forecast via Zoom on Wednesday. The meeting was attended by nearly 200 participants.
Reopening is important, he said.
“We can just get back to it,” said Basu. “At some point, you have to say we’ll take precautions, let’s wear a mask, let’s stay six feet apart, let’s not fistbump or elbow bump even, but we’ve got to reopen this economy. It’s the only public policy alternative to nothing.”
People are anxious to meet up, go to restaurants, go to movies, watch sporting events, he said.
The best-positioned people work in the public sector with greater job stability. The private workforce will be hammered, however, with unemployment reaching 20 percent, he said.
Last year, Basu said the national economy was in its 11th year of recovery. The country was at a 50-year low for unemployment with the fastest wage growth in a decade. This year, 1.04 million jobs were lost through April in Pennsylvania and 19 million in the U.S. through April, he said.
And that’s not including the May data.
“The data has not caught up to reality,” he said.
Basu said the restaurant industry will experience great losses with some businesses never returning, but the industry will come back slowly.
“There will be a handful that do reopen. The overall market will be smaller, but there will be fewer competing for that business,” he said. “They will be reasonably busy in the third and fourth quarter because of fewer competitors.”
Basu said the Greater Susquehanna Valley is uniquely positioned with a can-do workforce, a phenomenal work ethic supported by recent improvements in infrastructure, close proximity to major highways, and remarkable opportunities in health care, manufacturing and logistics. The area will benefit by reshoring initiatives, he said.
John Uehling, CEO and founder of Contrast Communications and immediate past chair of the chamber board, said the recent past months have changed the way people do business.
“Good things can come from bad,” said Uehling. “However there is work to do. The ability to mobilize a workforce requires highspeed internet. The ability to work from home requires highspeed internet. Access to additional online health care services requires highspeed internet. Online education, applying for college, applying for employment and unemployment, all require high-speed internet.”
