Like other major events in our lifetime, the ongoing pandemic has transformed us as well as our local and national economy in ways that are already apparent.
A chief economist with commercial real estate firm Cushman & Wakefield recently pointed out that “the longer the virus lingers, the more transformative it is going to be.”
Life marches on, yet it’s still a surreal feeling to experience a worldwide pandemic. Just a few years ago, a health crisis of this magnitude was the stuff of science fiction books and movies.
As far back as the 1990s, the FDIC and Georgia Banking Department required banks to develop pandemic policies. It all seemed unimaginable at the time, but the planning proved to be prudent when myth became reality.
Our bank, like others, already had plans in place for remote working and on-site safety precautions to protect staff and customers while keeping the U.S. banking system intact and money flowing.
Similarly, we have seen other sectors of the economy learn to adapt — and the ingenuity has been impressive. Many of our local restaurants and other service industries were at a standstill when state mandates initially closed their doors. But look how so many found ways to survive — and even thrive — with reinvented systems for food take-out and deliveries, outdoor dining and contactless payment.
These and other hospitality businesses that require direct, in-person service have been the most visibly impacted. But hardly any business has been unaffected by COVID.
Like the aftermath of the Great Recession that resulted in stronger lending regulations and more conservative business practices, the new COVID economy is making its own mark.
Work habits are already changing. With remote working now commonplace, some employees may never return to the office. Businesses can be more efficient with less need for expensive office space, but employers must grapple with new policies to ensure accountability.
COVID has reshaped attitudes, too. Employees likely will start demanding more vacation and family time, sabbaticals and other perks focused on more enjoyment out of life. There is already talk of four-day work weeks at some companies.
At least in the short term, businesses will have to listen. Just like sellers now hold the cards in our local housing market, workers have had more bargaining power with employers in the COVID economy.
Whether the reason is stimulus checks or people’s fears of returning to work, COVID has been behind the labor shortages that have put a major kink in supply chains.
At the local level, you may have noticed fewer “chicken trucks” laden with birds on the way to area poultry plants. There simply are not enough workers on the other end for processing. For the same reason, turkeys are already projected to be in short supply this Thanksgiving.
If you’ve been putting off necessary home repairs or a renovation project, it’s not likely due to procrastination. Construction materials are scarce, just like computer chips in the auto industry.
Everywhere, demand is outstripping supply. And like a fever or loss of smell, the COVID economy has its own symptoms manifested in rising prices and inflation. Maybe you don’t feel the price crunch yet, but inflation is definitely picking up its pace.
However, let me point out the positive — especially here at home. For the last several years, our economy in Northeast Georgia has witnessed double-digit growth of well over 10% a year. Normally, a growth rate of 5% to 8% is considered healthy.
My point is that— despite the labor shortages and growing inflation — we are not likely to experience a recession in Gainesville and the rest of Georgia for the near term. At most, we could experience an economic slowdown, which might even be healthy to maintain our overall growth trajectory.
There is a disclaimer to all this: Before too long, we must put COVID behind us and get back to business. Because until we find some way to shake this weary virus cycle, all bets are off on the true impact and legacy of the COVID economy.
Ron Quinn is former chairman of the Georgia Community Bankers Association and the president and CEO of locally owned Peach State Bank & Trust.