Team NEO Forecasts Slow Recovery From Coronavirus-Driven Economic Woes
The Northeast Ohio region is expected to lag behind the rest of the country in economic recovery and may not see pre-COVID employment levels until 2025, according to economic development organization Team NEO.
CEO Bill Koehler said the group’s researchers used data from Moody's Analytics and applied it to the context of Northeast Ohio, where parts of the economy rely heavily on hospitality and restaurants – though local manufacturing was affected by the pandemic as well.
"A lot of manufacturing companies, some of the smallest ones, who maybe didn't have as ready access to liquidity and capital as they shutdown, the restart for them will be harder," Koehler said.
The arts and entertainment industries face a twofold post-shutdown problem in the questions of consumer confidence and progress toward a vaccine.
"We can control the way we distance and the way we practice safe health practices, but we can't directly impact how the virus spreads and how people react to it," Koehler said.
Team NEO's projection for employment levels in the region not returning to 2018-2019 levels until 2025 is due in part to businesses that are expected to close permanently and a likely retraining process.
"Some restaurants will close," Koehler said. "We'll have to start up new ones. Any number of retail stores have been closed and may not start up again."
Additionally, some businesses also may take the restart as an opportunity to think differently about some of their operations, he said, such as investing in automation or expanding digital capabilities.”
Those who are currently unemployed but able to work have an opportunity, but the payoff might come later, according to Koehler.
"Be retrained, reskilled and get back into the labor force as we go forward and that kind of dynamic, that takes time," Koehler said.
Despite some the dire tone of some of the report’s projections, Koehler said Team NEO believes the region’s resilient manufacturing base can bounce back.
"We think there's a lot of reshoring opportunities, some onshoring opportunity, as companies see that they have an opportunity to improve the supply chains," Koehler said. "Bring more production here so we don't have to rely on longer supply chains and overseas production."
Koehler also cited higher education and the community's aggressive and creative production of personal protective equipment as good signs for Northeast Ohio’s economic future.
And since the pandemic remains a fluid situation, Team NEO will update projections as Moody's updates national estimates, Koehler said.