PORTSMOUTH – An economic forecaster is certain the coronavirus will have a negative impact on the state’s economy, reaching quickly into the restaurant and hospitality businesses in the Seacoast.
What Russ Thibeault is uncertain about is just how long and how severe an economic impact the spreading illness will have.
“I think it's people at the bottom of the food chain that get hurt the most – waitresses that aren't going to be able to get the tips because people aren't going out to eat – generally, service workers that can’t work from home,” said Thibeault, president of Applied Economic Research.
“If you can work from home, it’s still disruptive, but it’s not like not having your job,” said Thibeault, founder of the Laconia-based research company and a frequent presenter at economic forums, “because the owner of the pizza place can’t afford to pay you because nobody’s coming in to eat pizza because everybody’s afraid to go outdoors.”
The coronavirus is a virulent strain of illness that passes from person to person, causing the disease COVID-19 first identified in Wuhan City, Hubei Province, China, last month. Its fever, cough, and shortness of breath can be fatal in certain cases, particularly, according to what’s known so far, in the elderly and/or in people with underlying health issues.
For most people, the new coronavirus results in only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death. The vast majority recover. People with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover, according to the World Health Organization.
Keeping people away from each other has been prescribed as the best way to limit exposure and limit spread of the pandemic. As a result, scores of public events – from concerts to sporting events to church services – have been canceled or modified to limit interaction. Companies have canceled employee travel and conferences. Some companies, including Seacoast Media Group, are directing employees to work from home.
This remedy, according to Thibeault, while very necessary from a public health standpoint to address the illness, will certainly hurt the economy – nationally, statewide and locally.
“Those are all appropriate and they address the health issue,” he said, “but they cause economic disruptions. The better job we do addressing the health issue, which is more important, the more the negative impact is on the economy in the interim.”
Thibeault expects the hospitality industry to initially feel the effects of the virus-induced hibernation: Hotel rooms won’t get booked, dinner reservations won’t get made, shows at the theater won’t be seen.
“Eventually, it will spread through the economy, but lodging and restaurants will be virtually immediately impacted, if not already,” Thibeault said. “That affects the Seacoast because that's a major a major component of the Seacoast economy.”
Local restaurants are very active on social media, encouraging patrons to come through their doors with assurances they’ve taken steps to ensure their safety. They are rearranging seating to better accommodate “social distancing,” as well as taking extra care with cleaning and monitoring their own staffs for any signs of illness.
“ … we at the Portsmouth Brewery take seriously our responsibility to provide a safe, comfortable place for people to gather and to maintain a healthy work environment for our staff,” the Portsmouth Brewery said in a social media statement.
Cava in Portsmouth said it is “open and ready to give you a place to get away from the stresses of the outside world. We will continue to practice the highest standards of food safety and cleanliness, along with additional precautions matched to the seriousness of the situation to protect our guests and staff.”
Many similar notes of encouragement to diners from local restaurants and other businesses – from banks to car dealerships – abound on social media.
The potential plight of service workers who can’t telecommute was underscored by Portsmouth Health Officer Kim McNamara’s presentation to the city’s Economic Development Commission at its March 6 meeting. She told EDC members the commissioner of the N.H. Department of Health and Human Services has broad authority when it comes to ordering isolation of individuals or groups of individuals.
“The more that businesses and individuals can do their part to halt this outbreak and spread the disease, the less likely those measures are,” she said.
But, she noted: “We have an underlying issue, not just in Portsmouth, but in all communities that people in our service industry, which is a huge workforce here, don't often have benefits such as paid sick leave.”
She said these workers might be forced to make a choice: “Do I show up to work and potentially spread what I have, or do I pay the rent this month?”
“Additionally,” she added, “because they don't have health insurance, they can't get the proper diagnostic testing, so we don't really know what they may be suffering from and they can't get the proper treatment.”
The numbers show how dependent the state and this region are on people getting out and about.
Visitors to New Hampshire in 2019 spent $1.948 billion – mostly on retail sales ($734.7 million), accommodations ($320.1 million) and food services ($311.6 million).
Thibeault expects that after an effect on the hospitality sector the manufacturing sector would likely be next, given the disruption of the supply chain from China. A lot of goods produced in the country, including in New Hampshire, are dependent on certain parts and components coming from China.
Production in China, where the virus originated, dropped by 40%, according to Thibeault. Once inventory dries up here, and manufacturers can’t get their China-made components, production could be interrupted, further exacerbating an economy in flux.
“Uncertainty is the enemy of prosperity,” Thibeault said, “and what’s going on is a tremendous amount of uncertainty across the board. Employers are uncertain as to what the next two months are going to be like, consumers are uncertain, workers are uncertain. There's a tremendous amount of uncertainty and fear that one could say is disproportionate to the number of known cases, but it's not disproportionate to the way people feel about how fast this crisis is evolving.”
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