Our robust economy has crashed into a roadblock in many ways. It’s been a late spring, from airlines to factories to retail to entertainment. COVID-19, in a matter of weeks has changed the way we do business. Well, joining us tonight is Greg Wathan, the president and CEO of the Economic Coalition of Southwest Indiana.
Brad: Greg, our region of southwestern Indiana had been on a roll the past few years. The good times were coming in. How much damage though has this caused to our local economy?
GregL You know, Brad, it’s really hard to assess at this point in time. We know one of the the terms of metrics that we currently track are unemployment insurance claims, but that’s a lagging claim. And that’s impacted about 12.3% of our workforce have filed for unemployment. We expect that’s going to continue to grow. And we’ll know more about some of that data tomorrow morning at 7:30.
Brad: Toyota, considered one of the crown jewels we have here in the Tri-State, it has delayed production for another week. Your reaction to that?
Greg: Yeah, COVID sort of started the ball with how the impact within the economy, the reality is what’s really moving it forward now for companies like Toyota is lack of demand. And we saw this very thing happen in 2008-2009. With the financial crisis, we just saw the lack of demand for automobiles really crashed at that point in time. We’re kind of seeing it now. And in fact, the Center for Automotive Research was looking at automotive units with regard to cars and light trucks projected for this year to be about 16.2 million units in North America. They’re now projecting 11.2 million units. And when you think about Toyota in our market that has a significant impact not only on what Toyota is doing, but also the supply chain.
Brad: Let’s talk about the much smaller businesses here in the Tri-State, the mom and pop stores. These small business loans, are they really helping in the long term? We talked to a restaurant owner just last night, who said his business can only go so far if these conditions continue?
Greg: Well, I would think for small businesses in particular, restaurants, bars, those close contact kinds of businesses, they are probably bearing the brunt of a lot of economic decline. When you look at it, manufacturing as a whole, with the exception of Toyota, most of the manufacturing in our region are considered essential and they’re working. But restaurants, small retailers, they’re really struggling at this point in time. And so I would, I would say, unless we hear some good news from the governor on Friday, and they start easing the stay at home orders, we’re probably, we will probably see some real hard times for these smaller businesses to continue over the next couple of weeks.
Brad: Let’s talk about the federal stimulus money. We’ve heard a lot about that. Some people have been outraged that all the Los Angeles Lakers got federal dollars. This week, the Lakers have returned that money, how in the world could that happen? And how are those dollars helping Southwestern Indiana as you see it?
Greg: Well, if you contrast it what happened in 2008-2009 with the financial crisis, it took months for us to get some kind of stimulus. This stimulus happened almost overnight. Well, in the vernacular of government, it was overnight, and you ended up with, like the Los Angeles Lakers kind of thing, some companies should not have received these dollars. I think they’ve gotten it better, slowly, but surely, it will have an impact that will have a positive impact, whether or not we’ll see it on the small businesses. But we hope that this new tranche of funding that will be coming in we’ll see that impact show in small businesses, but we may not know for the next couple of months as to whether or not businesses are going to be able to stay in business or close their doors very briefly, because we’re running out of time here.
Brad: Greg, how long will it take to recover?
Greg: If any economist is going to tell you that it’s going to recover overnight, I’m not sure that it’s accurate. My gut feeling, though, is that we’ll begin to see some improvement within our region. By the end of the year, more than likely we’ll see some things probably not change until 2021. Possibly some sectors until 2022. We could very well see some of these small businesses, we could see 20% of these small businesses just not be able to survive.
Brad: All right, Greg Wathan with Economic Coalition of Southwest Indiana, Greg, thank you so much and stay safe out there.
(This story was originally published on April 29, 2020)