Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

March 13, 2020

Economists: Coronavirus to have major impact on CT economy

HBJ File Photo The Hartford skyline.
By Greg Bordonaro and Matt Pilon

The coronavirus is already having a major economic impact on Connecticut and it’s likely to get a lot worse in the weeks and potentially months ahead, economists agree.

And many industries will feel the impact, the full extent of which won’t be known for some time.

“The economic impact of the coronavirus will be widespread for Connecticut, as it will be for most all states across the nation,” said Alissa DeJonge, vice president of research at AdvanceCT, the state’s economic development partner, formerly known as the Connecticut Economic Resource Center.

DeJonge said employers are already encouraging their workers to telecommute, and a number of colleges are moving to online teaching. The industries where residents and students have effective access to broadband and technology at home will have the least amount of disruption. 
 
However, for industries that depend on people being in a particular location in order to make a product (manufacturing) or enjoy an experience (retail, hotel, dining) there will be a larger negative impact, DeJonge said. 
 
“In these unprecedented times, it is difficult to quantify the economic impact but the duration of the social distancing among residents and workers will eventually determine the extent to which our economy is affected,” she said.

[For employers looking for advice on how to deal with the coronavirus check out the Connecticut Business & Industry Association's employer guide]
 
Connecticut’s economy had a relatively strong third quarter, with GDP growth of 2.1% vs. 1% growth in the second quarter of 2019. That’s the latest data available. We won’t know for a while how the virus is impacting Connecticut’s $287.6 billion economy. 
 
One of the best short-term economic indicators will be employment numbers. The latest jobs report from the state Department of Labor showed Connecticut added 2,600 jobs in January but lost 3,300 jobs in 2019.
 
The unemployment rate was 3.7% at the end of January. 
 
The state DOL has a flashing message on its homepage encouraging people who become unemployed by coronavirus to file for unemployment benefits, a signal of the likely job disruption ahead. 

“Right now, the biggest problem is just the massive uncertainty we face across the globe and across the nation,” said UConn economist Fred Carstensen.
 
Carstensen said the biggest job growth in the state in recent years has been in hospitality and tourism, which will be among the hardest hit sectors in the short run and whose workers -- low wage, few fringe benefits -- will be hurt significantly.  

On Thursday, Gov. Ned Lamont signed an executive order banning all gatherings of more than 250 people in an effort to slow the spread of a coronavirus expected to infect hundreds of thousands of Connecticut residents in the coming months.

That’s forced Hartford’s entertainment houses to go dark.
 
All performances and events scheduled at The Bushnell through April 30, have been postponed. The Hartford Stage announced it was canceling all performances of “The King’s Speech.” The city of Hartford has also cancelled this weekend’s St. Patrick’s Day parade.

The Connecticut Science Center said on Friday it will close its doors to the public starting March 14 and will reevaluate plans by March 28.
 
The effect is that entertainment venues along with local restaurants, bars and hotels will all take significant financial hits over the coming weeks. 
 
Other large gatherings have also already been impacted, including the cancellation of a hunting and fishing expo at the Connecticut Convention Center.

Numerous other employers, groups and events have also been impacted by the epidemic.

Hospitals and nursing homes have placed restrictions on visiting patients and residents in an attempt to slow the transmission of coronavirus.

Connecticut courts have postponed new criminal and civil trials and plan to de-prioritize routine court appearances through the end of this month, the Hartford Courant reported.

The MetroHartford Alliance has canceled its scheduled events through mid-April.

Organizers of the Hartford Rib Off, an annual charity fundraiser in Riverside Park, announced Friday that the June event would instead be held Oct. 23-24.  

Meanwhile, the state’s utilities regulator has issued a 30-day moratorium on service shutoffs, aimed at protecting residents facing a financial crunch from needing to stay home. Attorney General William Tong filed an emergency petition Thursday seeking the moratorium. 
 
Long before the first known case of the current version of coronavirus, the pre-existing disruption of supply chains resulting from the Trump trade wars already inflicted damage and there will now be a significant drop in demand for virtually anything that is a discretionary expenditure (travel, new appliances, a new car), Carstensen said.
 
“That will have heavier impact further out,” he said. “And then households are likely to save much more because of this disruption -- and if we all save more, there is less aggregate demand.”
 
Carstensen said  J.P. Morgan is now projecting a recession in the second quarter and perhaps the third -- two quarters of contraction is an official recession.  
 
“So there will be a lot of short-term pain ... but likely more pain further out,” he said.
 
Carstensen said he’s keeping an eye on how the federal government responds. President Trump has pitched tax cuts to stimulate the economy, but that will do little to help those most hurt by the potential downturn, he said.
 
“What Congress does ... will perhaps have a significant impact,” he said.

Sign up for Enews

Most Recent

Most Recent

0 Comments

Order a PDF