The pandemic has had a severe impact on Michigan businesses and consumers, but the economy could improve rapidly in 2021, especially as more residents are vaccinated, economists and a survey show business owners.
While 67% of those polled in Michigan said the coronavirus pandemic has had a somewhat or extremely negative impact on their business, 16% said the opposite, that it
had an overwhelmingly positive or somewhat positive impact on their business, according to the Michigan Economic Outlook Survey revealed at a virtual Detroit Economic Club meeting on Tuesday.
The survey examined responses from more than 1,000 members of chambers, professional associations and economic development groups across the country.
Respondents whose businesses were negatively affected by the pandemic also had a negative outlook by 2021, while companies that have weathered the pandemic well had a positive outlook on the future, according to the results.
“It was striking,” said Gabe Ehrlich, director of the University of Michigan’s quantitative economics research seminar. “One of the things that encouraged me was that the outlook was generally positive for the future.”
The survey results highlight the unique nature of the pandemic, which has affected businesses in the leisure and hospitality and retail sectors disproportionately compared to others. In other recessions, the manufacturing sector has been hit the hardest in Michigan.
The leisure and hospitality industry employs more women, minorities and low-income workers compared to other sectors, thus disproportionately affecting these groups.
âPeople at the bottom of the income scale have been disproportionately affected by the pandemic recession,â Ehrlich said. âPeople with higher incomes generally have more opportunities to work from home. “
Ehrlich said jobs that require face-to-face interaction, such as those in retail, leisure and hospitality, are likely to recover at a slower pace than others.
There has been a decline in the number of women in the workforce during the pandemic, State Treasurer Rachael Eubanks said, as they are more likely than men to have jobs in these industries. They are also more likely to be responsible for parenting duties.
This is why it is so important that Governor Gretchen Whitmer set a goal for schools to offer in-person learning by March 1 so women can return to work, she said.
Eubanks also said federal aid will continue to be important to support consumer spending.
“This is going to be really important to continue this economic progress,” she said. “Michigan had $ 44 billion in federal aid that fell between the paycheck protection program, stimulus payments and enhanced unemployment benefits.”
Eubanks and Ehrlich were both optimistic about a return to normal with the vaccine rollout and the impact this will ultimately have on the economy.
âThe virus and the economy are so intertwined,â Ehrlich said. âIf the question is, ‘Is it worth spending the extra dollars to get people immunized and work fast’, the answer is ‘Yes’. This is a very high economic multiplier. “
Still, he said he was concerned about the longer-term impact the pandemic could have on business travel and office needs, and what will happen to inner cities of cities if demand for both continues to decline.
Contact Adrienne Roberts: [email protected]