Economist Todd Hirsch Gives Outlook to Businesses
ATB’s Chief Economist Todd Hirsch gave members of the Vegreville & District Chamber of Commerce a snapshot of what to expect this summer and into the fall during a Zoom virtual presentation during its general meeting on June 3.
Hirsch said the actual unemployment rate is higher than 13.4 per cent. With the downturn in the economy, he predicted the contraction would be, “Worse than anything we’ve seen since the great depression.”
While things are extremely difficult right now, Hirsch said he was glad to see the support the federal government has provided since the COVID-19 pandemic hit. “At the onset of Covid we saw immediate government action.” He said it was the right thing for the government to do to ensure the economy didn’t completely collapse. He said the banks seem more or less resilient, and he hasn’t seen any of the banks going under.
Hirsch went over four different scenarios that could come into play this summer and fall. He said the most likely scenario would require people to take pre-cautions so that when the second wave of Covid comes that it wouldn’t prolong the recession. “It will be extremely dangerous, but if we take precautions, we will survive. I think people understand why we need to do this, and are doing so.” He expects to see brunt of COVID-19 in 2020 and says if people keep doing the right things, it will disappear eventually.
When it comes to economic diversification there maybe opportunities in the agri-food, petrochemical, technology, and tourism sectors. While these things have been talked about by the provincial government, he said diversification is complex would be 20-30 years down the road and happen organically over time. He said he was encouraged that the government was looking to nudge at it.
He also said there may be opportunities in the manufacturing sector as people are looking for more locally sourced products. He said there are possibilities in agri-food, health care, and assembly manufacturing.
While there has been a lot of attention on tax rates, Hirsch said it’s a piece of the equation, but not only thing municipalities should look at. He said some of the things are: quality of life, welcoming community, amenities, aesthetics, and technology. “Now more than ever those are important because workers can move anywhere. Municipal governments have to pay as much attention to that as municipal tax rates.”
Hirsch doesn’t expect interest rates to rise, and that it would be a good time to invest in infrastructure, and that governments should be doing that.
Tom Koep, Economic Development Manager for the Town of Vegreville, said, “It was awesome that the chamber of commerce arranged to bring him in, and fantastic that local businesses were sponsoring him coming in because he’s a really good speaker, and he’s got a really good grasp on the economy as a whole.”
In a nutshell he looked at the scenarios as to where he see’s our response to Covid and where the reopening of the province. “It was interesting and entertaining presentation. It’s nice also to see the optimism. Basically he’s saying if we’re cautious about the relaunch and reopening of businesses there’s no reason why we can’t make it through this with a few bruises, but basically at least the economy gets back to regular within a year or so.”
I think the main message that I’m getting is we can’t just assume everything is going to be ok and just jump right back in. We need to do this cautiously. We need to take it one step at a time. We need to make sure we are implementing a lot of things that have been going on for the last few months like washing the hands and using sanitizer on the hands putting on gloves and yes, sometimes wearing masks. But if we do it the right way and approach it the right way which I’m seeing at a number of local businesses.
If they continue to do this at one point in time we’re going to see less and less cases to the point where there’s hopefully there’ll be none. We can resume fairly normally. I don’t think normal will ever come back, I think that we’re probably see people more cautious with how and what they see and do, and a little more aware of social distancing and like I said washing hands and using sanitizer….But at least there’s optimisim for the future that’s the main message is that if we do it right we can come out of it okay.
I think one of the major benefits that Vegreville and Vegreville businesses have is the fact that we had only one case, it was very early on, and it’s been resolved there was no pandemic per see in Vegreville it was just the one case which was brought back from travelling and so we never got the outbreak here and think that’s a message that our businesses should be shouting and our chamber should be shouting and we’re certainly going to be promoting is the fact Vegreville is a very safe place to shop in. The he businesses that remained open were very cautious and very careful and hopefully they will continue to do so which makes it a very attractive place to come and do your shopping I think that’s probably as good as take away as we can get out of this if we do it right, which was what Todd was preaching, and we come out of this alright, we take precautions, there’s no reason why businesses can’t return to the I guess we’ll call it new normal and hopefully not only get support from local people which has been fantastic through this but maybe draw in some people from places we weren’t drawing in before because of the safety factor.”