‘Faster than 2008’: Experts predict CT’s recovery
Connecticut spent the past decade recovering from the Great Recession and the state never quite gained momentum. Now it will have to rebound from an even bigger blow.
State residents have filed more than 400,000 new unemployment-insurance applications since March 13, generating a level of need unseen since the Great Depression. A prolonged economic recovery from the coronavirus crisis looms, with the plight of small businesses, rising debt and another state budget meltdown posing major challenges.
Clearly the recovery will take longer than a year. And considering the state is in the same choppy waters as the whole nation and world, there’s no reason to believe Connecticut will see another lost decade like we had in the 2010s.
United States will have borrowed $3 trillion or more for coronavirus, and that, of course, isn’t just a state problem. And house prices in Connecticut have been so flat for so long that the state might attract people looking to leave expensive cities — all the more after the pandemic.
So the prognosis for Connecticut is far from hopeless.
“Given the root cause of this economic crisis being a public health crisis, as long as we can address the public health issue, I think we’re going to see a recovery faster than we saw from 2008. But it’s certainly not going to be V-shaped,” said Brian Marks, executive director of the University of New Haven’s entrepreneurship and innovation program.
Economists expect the jobless level to far surpass the previous peak of 9.3 percent, which was set in late 2010, with the only question being how long it lasts.
“We will see very painful economic repercussions — in the labor market, in particular,” said Lucjan Orlowski, an economics professor at Sacred Heart University. “The repercussions in Connecticut will be longlasting.”
The imperiled condition of many small businesses could further affect employment levels. “It cannot be overstated how fragile these businesses are,” said Fran Pastore, CEO and president of the Women’s Business Development
Council. “They’re often juggling multiple responsibilities besides their businesses. They’re caring for young children or may be caring for elderly parents.”
At the same time, businesses’ and individuals’ escalating debt levels could cramp consumer spending and threaten jobs.
“Unlike the federal government we cannot create money,” Marks said. “I do worry for households and firms that the debt is mounting. But, in one sense, what will the alternative be?”
But there are auspicious 16 14 12 10 8 6 4 2 0 -2
“Given the root cause of this economic crisis being a public health crisis, as long as we can address the public health issue, I think we’re going to see a recovery faster than we saw from 2008.”
Brian Marks, executive director of the University of New Haven’s entrepreneurship and innovation program
signs too. Defense manufacturing and bioscience remain strong and could spur hiring.
And of course, some of the lost work will return as soon as the shutdown ends. The segment of businesses that are totally closed represents just 10 percent of state economic activity, but 48 percent of the March-April job losses, the governor’s office said.
“We need to do everything we can to ensure we are protecting working families and helping small businesses survive during this period because they support the majority of local jobs in our state.” said state Rep. Caroline Simmons, D-Stamford, co-chair of the state legislature’s Commerce Committee. “I am optimistic that Connecticut's economy will recover, but it will take time.”