There are currently two crises underway simultaneously. The advance of the novel coronavirus is taking a terrible toll in terms of physical and emotional well-being. At the same time, job losses resulting from ‘social distancing’ are sending the economy into a tailspin. To fight on both fronts, governments are advancing rescue packages of never-seen-before dimensions. Every day, the tremendous number of factors in play reconfigure in a new way. These ‘from the trenches’ notes attempt to shed some light along a murky pathway.
- The following distills an assessment of the economy made by Moody’s Analytics. In this clock-stopped world we’re living in, all forms of tourism and commuter travel are down, reducing the demand for hotel rooms and refined oil (gasoline), which also means less need for exploration and extraction activity. The official names of the three most affected and interconnected industrial sectors are ‘transportation and warehousing’ (including air and cruise ship transport), ‘leisure and hospitality’, and ‘oil and gas extraction’. If your local economy is disproportionately dependent on one or more of those sectors, the speedbumps along your road ahead have added inches in height.
- Three important sidebars to social distancing have freed up hospital beds for use by coronavirus patients. The stay-at-home edict has meant fewer traffic accidents and a reduced number of road-warrior injuries. Also, violent crime has taken a break. Instances of broken ribs, bruised fists and knife or gunshot wounds requiring medical attention are in remission. And finally, with everyone indoors, sports injuries are at a minimum.
- Mention was made in the previous Trenches article that ConstructConnect is keeping an eye on the number (as a rolling seven-day total) of construction projects that experience a change in their bid or start date status. A change, in a time of such swift economic decline, suggests work that is being delayed, postponed or possibly cancelled. On April 2, the U.S. Changed Status figure was +55% month over month and +67% year over year. Canada’s results were more exaggerated, +114% m/m and +143% y/y.
- The percent changes in the above bullet point applied as of the beginning of April. There has been some settling down since then. A week later, on April 9, the U.S. 7-day rolling number for Changed Status projects was +30% m/m and +27% y/y. Canada, on April 9, recorded +46% m/m and +66% y/y. While not quite as eye-popping as on April 2nd, those week-later results are still impressively higher.
- We’re all now about a week away from sporting pandemic hairdos. Don’t know about you, but I’m looking quite the fright in the morning, … and in the afternoon, … and in the evening.
Read the previous article here: The Economy Under COVID-19: Notes from the Trenches – April 15, 2020.