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The Economy Under COVID-19: Notes From the Trenches - April 28, 2020

Alex Carrick
The Economy Under COVID-19: Notes From the Trenches - April 28, 2020

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.

  • According to CBRE, there are seven major wholesale data center markets in the U.S. By far the biggest is in northern Virginia, with the community of Ashburn in Loudoun County (near Dulles Airport) at its core. The other six, from east to west, are Tri-state New York, Atlanta, Chicago, Dallas-Ft. Worth, Phoenix and Silicon Valley. Prior to the pandemic, they were viewed as being recession-proof. That assertion is likely to be proven true many times over in this current coronavirus crisis.
  • The same won’t be said for call centers, though. Data centers are full of computer equipment knows as servers. Call centers are chock full of people in cubicles. Who knew that mingling with co-workers would one day become so dangerous? Call center employees are upset about their working conditions and want to operate from home.
  • There’s a case to be made that what the world will need going forward is more James Bond economists. That’s to say, economists who think like spies. The reasoning is as follows …
  • Traditional economics, grounded in fiscal and monetary theory, teaches that downturns occur as the result of cyclical factors tied to inflation, interest rates, etc. Some theoreticians, in a small corner of the field of economics, have long studied the impacts that spread far and wide from natural disasters, such as tornadoes, hurricanes, floods, droughts and wildfires. They were already moving from their ‘small corner’ into the rumpus room on account of the proliferation of nasty weather events brought on by climate change. Now, with a pandemic in full swing, they’re about to be invited into the living room, where they may feel most comfortable hanging out with members of the intelligence community. There’s a commonality of wary outlooks concerning negative extraneous events (geopolitical, viral or whatever) to be shared.
  • An examination of supply chains is a relative newcomer to academic curriculums. Like disaster impact studies, ‘logistics’ is about to climb several rungs on the significance ladder. The tug of war between globalization and de-globalization will see to that. (By the way, what’s another word for cuddling? … De-distancing.)

Read the previous article here: The Economy Under COVID-19: Notes from the Trenches – April 27, 2020.

Alex Carrick is Chief Economist for ConstructConnect. He has delivered presentations throughout North America on the U.S., Canadian and world construction outlooks. Mr. Carrick has been with the company since 1985. Links to his numerous articles are featured on Twitter @ConstructConnx, which has 50,000 followers.

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