In a matter of days our impression of the U.S. and local economy has shifted from one that expected continued growth to a more somber outlook that questions how far the economy, equity markets, interest rates, and oil prices could actually fall. Uncertainty resulting from the COVID-19 pandemic is the new normal.
Harvard Epidemiologist Marc Lipsitch has been widely quoted that “40 to 70 percent of the human population could potentially be infected by the virus if it becomes pandemic.” While Lipsitch went on to revise these projections down to 20-60% of adults – children seem to be less affected by COVIS-19, though are still believed to be significant carriers of the disease – the data being shared from multiple sources, including the Ohio Department of Health, depict a consensus that the rate of infection will be significant.
As Ohio Governor Mike DeWine implements daily policy orders aimed at “Flattening the Curve” of infection, these decisions will undoubtedly push the economy to drop. This may be exacerbated if the Governor orders construction sites closed around the state similar to what was recently done in Massachusetts where Boston Mayor Martin Walsh ordered a construction project halt amid concerns about worker safety. Construction has thus far been an emblem of Central Ohio’s strong economy and should this come to pass, it could be a body blow to our region that may be difficult from which to recover.
According to analysts at Goldman Sachs, U.S. monetary and fiscal policy decisions will be key minimizing factors to recessionary pressures and the Federal Reserve’s fund rate cuts have paved the way for policy makers to consider other potential fiscal stimulus. But how will this impact construction? I encourage all members to attend the following ABC National presentation by our Chief Economist Anirban Basu to get the latest data on the spread of the COVID-19 and the market responses to its spread, along with the economic consequences to our industry.
The Economy in the Time of Coronavirus: The Near- and Longer-term Outlooks for the Economy and the Markets
Thursday, March 19, 2020
3:00PM – 5:00PM