More than 800,000 Michiganders sought jobless benefits over the past three weeks. The closure of non-essential businesses limiting the spread of coronavirus is hitting the West Michigan economy hard as indicated by March Institute for Supply Management Research survey.
“The problem is, is we don’t know where the hole is right now, or how deep it is going to be, let alone start to figure out what it’s going to take to dig out of it.”
Brian G. Long is director of Supply Management Research in the Seidman College of Business at Grand Valley State University. While it’s too early to assess the economic impact of the COVID-19 pandemic, one thing is clear.
“With this much of the economy shut down, it’s probably going to be an absolute record low.”
Long is focused on the area’s cyclical industries; auto parts suppliers, office furniture makers and aerospace and at what point can they begin recovering?
“We also have, in a recession, any recession what we call structural damage. In other words, companies that go out of business never to return again.”
That’s the consumer sector where restaurants are especially hard hit. That’s not to say the entire economy has come to a halt. Agriculture and the food supply chain remains operational with some bottlenecks.
Long says the $2 trillion federal stimulus package provides a glimmer of hope for the unemployed who will soon receive a check in the mail and unemployment benefits.
“There is a limit to what you can do as far as throwing money, if you will, at what amounts to a virus. All we can really do is again, soften the blow.”
Long explains the development of anti-viral treatments or the development of a vaccine are what will lead to an economic recovery.
Patrick Center, WGVU News.