South Jersey Faces Possible 28% Economic Contraction Due to Virus
South Jersey’s economy appears particularly vulnerable to be dragged down by the coronavirus pandemic due to its reliance on hospitality businesses, and the longer it takes for somewhat normal conditions to report the deeper the cut will be, says a Stockton University report.
South Jersey’s economy appears to have had its best performance since 1984 last year, says the South Jersey Economic Review, which unfortunately has to bury that observation under more than three pages of analysis of how much the coronavirus is likely to set the region back.
“2019 was a very solid year for the regional economy, no doubt,” said Oliver Cooke, an associate professor of economics and editor of the review.
Last year, jobs across South Jersey increased by 7,300, more than 3%, and unemployment was down despite a growing labor force.
It’s obviously a different story now. Cooke projects the region’s economy could contract between 12% and 28% this year, depending when the economy approaches normalcy – mid-June being a best-case scenario, August seen as the worst-case.
Gov. Phil Murphy said last week that he doubts New Jersey will have a typical Memorial Day weekend this year.
“And that’s very important for the South Jersey economy because so much of the year’s economic output so the speak is very much tied into the summer Shore season,” Cooke said. “And so the longer it takes to kind of get back to normal, the more summer weeks are effectively lost down the Shore.”
Cooke said the pandemic will surely have a worse impact than the Great Recession, in which South Jersey’s economy contracted nearly 10%, which was about four times more than the national impact.
“A relevant question is obviously how quickly do we get back to some semblance of normalcy. I think everyone at this point understands that getting back to normal isn’t going to be quite February 2020 normal,” Cooke said.
The drag depends not only on when Murphy loosens stay-at-home restrictions and closures of nonessential business but also on how long it takes for people to feel comfortable being in places such as a casino floor, restaurants or a beach.
Cooke said a June return to normalcy “seems like really wishful thinking” at this point, pointing to how even after casinos reopen, their ‘normal’ operations will be very different.
“You’re not going to be able to have six, seven, eight people sitting around a poker table, right? You’re going to have to have two. Or a blackjack table or something. You’re going to have to space people out along the slots,” he said.