Covid 19:The Second Wave
We are now in our 9th month living with this virus, COVID 19. The world pandemic has changed life for everyone, forever, with so many deaths, hospitalization, new ways of living with masks etc, shut downs in our schools and virtual learning becoming prevalent.
Our economy has been massively affected as well with high unemployment, large drops in revenue by many businesses and huge deficit spending by all levels of government. Some businesses have been forced to close, probably never to come back.
The long talked about second wave of COVID 19 has actually arrived. Many locations, including Northwestern Ontario, have begun to get more cases than at the beginning of the pandemic, which is scary. Our US border remains closed and you wonder what the second wave effect will actually be on our economy.
It seems to really be different depending on your sector. If you are in the transportation business you are massively negatively impacted.The hospitality industry with hotels, restaurants and entertainment venue are in difficult times. People are just not travelling and in fact may not be allowed to freely. So when your business has a large capital investment, with ongoing monthly fixed costs it is challenging.
For instance the 1500 hundred seat Thunder Bay Community Auditorium remains closed for this whole period of time. The Fort William Gardens is only just now planning to open again. It is fortunate they have the financial strength of the City of Thunder Bay behind them. Many private sector businesses aren’t as fortunate. It is good that governments have provided some financial relief to them to try and keep going.
Earlier shutdowns at manufacturing facilities have created backlogs on their orders meaning you may have to wait for products much longer than normal.You could be out of luck, at least this year, until they get back up to their normal pace of output. On the other hand some business has done well in this pandemic environment, even better than before. The question is why? Well in the instance of the Thunder Bay market we have the good fortune of a large government employment sector which stabilizes the economy. Most of these workers are still employees and doing well with disposable income to spend. The pandemic has limited options on what you feel safe or are allowed to do so this more means spending in new areas. For instance outdoor activities have dramatically picked up, meaning shortages in obtaining products sometimes. When the economy fully opens up and people feel comfortable in the future there could be a large pent up demand leading to high spending levels.
So where do we go from here. Well that is the $64,000 question! I believe we are going to have to change our way of doing things. For instance many people have begun to work remotely from home. You have meetings by zoom on a regular basis. The technology of today means we have tremendous information at our finger tips, even on our smart phones. It is really amazing how instantaneously information flows. In my case I deposit our corporate cheques using the bank app and my phone. This means you rarely visit a bank physical location any more. You can also order more online or by phone from local business and get delivery right to your door. I think we may have less formal office usuage in the future. In business this may create financial savings, so therefore-become more attractive, even after things become more normal.
Local businesses may have to create a more online presence and e commerce opportunities. I have spoken to some local entrepreneurs recently that have done extremely well moving beyond their physical locations. Many products and services, however, don’t lend themselves as well to not having the physical presence.
So we are in a great period of change which was here even before the pandemic, but accentuated now.You really have to spend some time trying to figure out how to adapt and move forward in the best possible way for your situation.