As most of us know by now, the current coronavirus/COVID-19 pandemic is moving quickly, and, day by day, there comes new updates of a healthcare challenge, treatment breakthrough, or governmental response. In other words, the crystal ball is murky and will remain so for the foreseeable future.
The effects of the pandemic on the world’s economy have been crushing: We’ve seen massive drops in the global stocks and futures markets, and the unemployment numbers coming in are staggering.
Downtown Tuscaloosa, home to The University of Alabama, where I am dean of its Culverhouse College of Business, is usually a very vibrant place, with a mix of students, residents and visitors walking about and patronizing the boutiques, coffee bars and eateries that help make this place so special and livable.
In order to curb the spread of the coronavirus and “flatten the curve” so that hospitals can cope with the massive influx of direly sick patients in need of ICU beds and respirators, a number of wide-ranging and deeply-impacting mandates have been made at the federal, state, local, and, for us, university system-level.
All of this is a smart move to ensure public health, but the effects are palpable: businesses, especially those in the retail and service sectors, are taking a beating.
However, help is on the way.
The $2 trillion federal stimulus package will do much to get the economy back on its feet and restore confidence in the markets. More locally, the Chamber of Commerce of West Alabama and the Alabama Small Business Development Center have been providing excellent information via webinars and calls, wherein participants can get the hard details about applying for economic injury disaster loans or coping with workforce issues.
Here at the state’s flagship business school, we have an incredible expert resource in our faculty. I asked a number of them about ways Alabama business owners can cope with the coronavirus pandemic and to provide insights into the economics at play. Those insights are as follows:
Dr. Erik Johnson, an assistant professor of economics, offers practical advice:
Apply now for small business disaster loans, contact the Alabama Small Business Development Center, work with your employees so that you and they can hit the ground running when we get back to ‘normal,’ and don’t be ashamed to take help from the government or loyal customers.
Get connected, says Dr. Theresa Welbourne, who is the executive director of our Alabama Entrepreneurship Institute and oversees The EDGE, the business incubator and accelerator located here in Tuscaloosa:
Implementing an employee resource group or affinity group, plus clear leadership strategy, can help a company be more united during tough times. Set daily goals and focus on what’s needed to get through a series of sprints. Celebrate when you meet a goal. Stay connected with each other. Make it personal and listen to employees’ families and neighbors’ concerns, fears and hopes.
Dr. Ahmad Ijaz, executive director in our Center for Business and Economic Research, is looking at key economic indicators, and it’s bearish:
The decline in the second quarter will most likely be much more severe than we first anticipated, probably a 3-4 percent drop in GDP for the state of Alabama, with employment falling at a much faster pace than output. The recovery in the third quarter will be fairly weak, due to supply-side constraints facing Alabama manufacturers and weak consumer and business spending, but, hopefully, Alabama’s economy should be back on a normal path of recovery by the fourth quarter.
So not entirely good news, especially since many signs indicate that we are probably facing a recession at this point. However, a recent report by the Boston Consulting Group suggests that certain overall sectors, such as software and services, healthcare, and equipment and services may rebound more quickly than others like energy, transportation, consumer products and retail.
Alabama prides itself on its resiliency in the face of challenges and sense of community. Evidence of the former is in the bold and assertive response of our citizens when disaster strikes, the latter is in how we care for our neighbors in times of need.
And all of that is on display right now.
The coming weeks – and possibly months – will push our state’s healthcare system and economy extremely hard. And when COVID-19 finally runs its course or at least becomes manageable from a healthcare perspective, the onus is on our established businesses and government officials, as well as new entrepreneurs and innovators, to quickly assert themselves and rebuild.