Impact of coronavirus pandemic on national and D.C.-area economy: initial blow to service industries will trickle to other industries and consumer sentiment, researcher says
Fairfax County, Virginia, April 2, 2020 — Jeannette Chapman, director of the Stephen S. Fuller Institute at George Mason University, said in a webinar presented today by the Northern Virginia Economic Development Alliance (NOVA EDA) that it will take a year for the overall Washington, D.C.-area economy to rebound from the effects of the novel coronavirus (COVID-19) pandemic.
The Northern Virginia Chamber of Commerce and the Virginia Chamber of Commerce partnered with the NOVA EDA in presenting Fuller Institute findings on the impact that the public health emergency is having on the national and regional economy.
“The speed of this recession is unprecedented,” Chapman said, noting that this downturn is unique because it is based on a health crisis rather than a cyclical business downturn.
Many “face-to-face” service industries have seen precipitous declines in the last month as the virus spread, Chapman noted. She used charts showing TSA checkpoints at airports nationwide had dropped almost 93 percent from a year ago, hotel occupancy was down 56 percent in the middle of March compared to last year (and probably would show further declines by the end of March), dining reservations and movie ticket purchases were down to near zero levels, and vehicle miles traveled is down 41 percent nationwide.
This will have ripple effects on other industries, including professional and technical services, financial services and construction, and then dampen consumer sentiment.
The Washington-area gross regional product could drop nearly 1 percent in 2020 but could rebound and increase 3 percent in 2021, Chapman said.
Later in the webinar, Alex Iams, executive vice president of the Fairfax County Economic Development Authority (FCEDA), noted the speed with which local, state and federal lawmakers have made resources and funding available for businesses affected by the pandemic. He noted that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed by Congress and signed into law by the president makes $350 billion available to small businesses as loans that can become grants.
Governments and economic development organizations, including the FCEDA, are working to connect businesses with resources to help them navigate the crisis, Iams said.
Victor Hoskins, president and CEO of the FCEDA, said it is important for business people and policy-makers to understand the impact of the pandemic on the economy. “If we don’t understand the problem, we can’t devise a remedy to solve it,” he said.
The FCEDA and the NOVA EDA will continue to present information that can help businesses navigate the crisis, Hoskins said.
The Northern Virginia Economic Development Alliance promotes and markets Northern Virginia outside the region and presents events and information to help businesses succeed in the region. Members of NOVA EDA are the Alexandria Economic Development Partnership, Arlington County, City of Fairfax, Fairfax County Economic Development Authority, City of Falls Church, Fauquier County, Loudoun County, City of Manassas, City of Manassas Park and the Prince William County Department of Economic Development.
The Fairfax County Economic Development Authority promotes Fairfax County as a business and technology center. In addition to its headquarters in Tysons, the FCEDA maintains business investment offices in Bangalore/Mumbai, Berlin, London, Los Angeles, Seoul and Tel Aviv. Follow the FCEDA on Facebook, Instagram, LinkedIn, Twitter and YouTube.