MIAMI – Economists believe this is a crucial time for South Florida and the continued health of the economy.
Many local jobs are hinging on whether policies and public behavior promote transmission of COVID-19, or work to limit it.
“The real risk is that things start to flatline a little bit until the variant is brought under control,” said Adam Kamins, Director of Economic Research at Moody’s Analytics.
If policies are put in place that facilitate transmission rather than limit it, they could have trickle-down impacts to various aspects of the local economy.
“We could see workers going back to being remote, we could see local school closures if there are outbreaks, so I think all of that creates significant disruption in the economy and that could hurt south Florida,” said Kamins.
Consumer confidence is also on the decline amid the summer ‘pandemic of the unvaccinated’ case surge.
“There is a lot of mounting risk now, so I think if the Delta Variant continues its surge in South Florida, that could significantly slow the pace of the recovery for now,” Kamins said.
Economists said the rapid surge in cases could swiftly stifle economic gains as unmitigated contagion spooks consumers.
Mallory Newman of the global research company Ipsos says their research shows consumer confidence is in a steep decline.
“The level of perceived risk with certain activities, like dining out at a restaurant or going out to stores, is once again creeping upwards, so once again we are at this tough point where we have to deal with the rise in cases and uncertainly for what that means for the economy, while still trying to desire to push forward and re-open but do it safely,” she said.
Newman said Ipsos’ latest consumer confidence tracker shows that as of last week, consumer confidence is in “precipitous decline” amid the summer surge.
“With COVID cases rising, consumer confidence has fallen to its lowest levels since February 2021,” Ipsos researchers have found.
Added Newman: “We are seeing increasing concerns about jobs and the economy.”
Newman said other research insights include:
- Overall consumer confidence is down
- Comfort in household spending has declined, as this emerges as one of the biggest concerns of the week
- Americans are also showing concerns over job security, as the jobs index (covers job security, personal job loss experience, and employment outlook) has declined, too
Case Mitigation To Aid With Health Of The Economy
This summer’s variant-fueled so-called ‘pandemic of the unvaccinated’ now threatens to flatline Florida’s economy, explains Adam Kamins of Moody’s Analytics, which forecasts the outlook for metro economies.
“Consumers are a bit spooked by the variant and that could have a significant impact on consumer industries, which have already been hit extremely hard in south Florida, actually even more so, than in the rest of the US,” said Kamins.
Kamins added another variable they are monitoring is how unmitigated case spread impacts business travel.
“It goes back to getting the virus back under control, and as long as the variant is still raging, I think business travel is going to be very depressed, which has major implications for hotels and restaurants in South Florida,” he said.
Experts say South Florida is at a critical crossroads, with livelihoods potentially hinging on non-partisan case mitigation efforts, like masks and vaccines.
“The three most primary factors in reducing the spread of the disease are social distancing, masking and the vaccine,” said Geoff Luebkemann of the Florida Restaurant and Lodging Association. “And those are not political statements or political choices they are public health interventions.”
Said Kamins: “I think if enough people are getting vaccinated and the right precautions are put in place. If the right things are done now, it is possible that the economy could be up and running, kind of back on the trajectory it is on, by the time we can get to the fall and early winter. Mask mandates and doing things like allowing schools to impose mask mandates to reduce the transmission, those are relatively cost-less economically and that would actually enhance the job security then of really everybody, but especially people in consumer industries who were hit so hard in the initial covid wave.”
He added that, “If there are going to be policies in place that either promote transmission or don’t do anything to kind of limit the transmission than that does create significant risk to the rest of the economy.”
Vaccine rollout that helped drive the economic recovery surge during this ‘pandemic of the unvaccinated” could threaten those gains.
You may remember how economic recovery and a travel rebound, critical to Florida’s tourism-dependent economy, dovetailed with the vaccine rollout.
“By and large, the single biggest game changer in driving traffic and revenues, both on the food and lodging side, has been the vaccine,” said Luebkemann. “Without question, the vaccine and the consumer confidence generated by that has really contributed to releasing some of the pent up demand that we have seen from both out of state travelers and visitors to our state, as well as our local residents getting back out and patronizing their favorite restaurants.”
Luebkemann said as of right now, “demand remains strong.”
While they are seeing a bit of a dip in revenue over the last week or so, he says that could be attributed to families prioritizing budgeting for back to school-related expenses rather than the Covid spike.
Luebkemann added that the hospitality industry continues to be attune to the safety considerations expressed by customers.
“Cater to their safety,” he said. “We are doing so and feel like that is driving some strong demand right now.”
Economists say projecting forward is tough given much will depend on the length and severity of current surge in progress.
“We are all exhausted by this historic time,” said Lubekemann. “I beg everyone, who either travels or patronizes hotels or goes out to their favorite restaurant be patient with us, be patient with one another, and we will get through this if we are kind to each other.”
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