The Economy under COVID-19: Notes from my New Hiding Place

Since we’re all cautiously emerging from sanctuary, the former title of my articles, written while I was housebound – Notes from the Trenches, – no longer applies. Therefore, I’ve chosen a new heading, as you will observe above. It still captures a certain wariness on my part.

Out-of-this-World Supply Chains

When on the speaking circuit, I sometimes try to have fun with an audience by asking, “What is the most expensive construction project ever built?” I’ll often hear back the Great Wall of China, or the pyramids, or the Chunnel between France and England. Many of you probably already realize it’s a trick question. The most expensive construction project ever built, regardless of the usual qualifier about taking inflation into account, isn’t on earth. It orbits over our heads 16 times a day, at 90-minute intervals. It’s the International Space Station. Furthermore, at a time of continuing pandemic and wide-spread social unrest, the ISS has become a source of out-of-this-world good news.

On May 30th, for the first time in nine years, dating back to 2011, NASA astronauts were launched into space from U.S. soil. During the past decade, other Americans have taken similar journeys to the ISS, but on Soyuz spacecraft that lifted off from Russia’s Baikonur Cosmodrome in Kazakhstan. Particularly noteworthy concerning the latest voyage has been the private sector involvement. Establishing a precedent, mission control was handed over to a non-government commercial firm. It’s been Elon Musk’s SpaceX Dragon rocket that has carried the ‘payload’. As a respite from bleak news, it’s been nice to have something positive to engage one’s attention.

But I’m sounding too pessimistic. Here’s another upbeat story. To process an early surge in online orders during the pandemic, Amazon hired 175,000 temporary workers. The company is now offering full-time positions to 125,000 of those part-time staffers. The change in status will become effective right away. Not to be left behind in its fight for customers, Walmart has spoken of adding 235,000 personnel in its warehouses and stores.

In the health crisis, Amazon, Walmart and many others have been exposed to inventory restocking problems resulting from globalization. The word ‘interruptions’ has been used a lot. If you want to talk logistics, however, consider the following. While the ISS doesn’t sell a product, when it comes to a long and at-risk supply line, it must surely be ‘the poster boy’.

I’m wondering what’s been happening in our office space since the day we all departed. I like to imagine the desktops we abandoned are playing poker in the boardroom. The fridge and the sink are tossing the microwave back and forth in the lunchroom. And in the main office area, the partitions are asleep and snoring, blissfully unaware of what’s in store for them. They have no idea how hard they’ll have to work when we eventually return and social distancing will need to be maintained.

Read the previous article here: The Economy under COVID-19: Notes from my New Hiding Place – Within the Herd (June 5, 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.