Experts: Coronavirus could impact Chester County’s economy
May 10, 2020
Fran Maye fmaye@21st-centurymedia.com
WEST CHESTER — The coronavirus could have a real and direct impact on Chester County retail traffic and will likely slow hiring for the foreseeable future, local economic experts predict.
“For Chester Countians, the impact could be felt with less retail traffic in stores and restaurants,” said Kevin Donohue, a certified financial planner in West Chester. “On a broader level, the decreased economic activity could slow hiring and increase the potential for layoffs for local employers.”
The Dow Jones Industrial Average tumbled 2,013 points, or 7.8 percent Monday, its steepest drop since the financial crisis of 2008, as mounting fears over the coronavirus combined with a crash in oil prices to send a shudder through world markets. The staggering losses immediately raised fears that a recession might be on the way in the U.S.
“How this ends is anyone’s guess but broadly we will take two extremes,” Donohue said. “First the good – this is brought under control by late spring early summer and the global economy starts up again but after a couple quarters of negative growth (a recession) and lost profits for the year in American corporations. For the bad – after a false sense of victory during the summer months and the virus makes a boomerang appearance in the fall and its effects carry into next year before finally running its course a year or so from now. In both instances, as a result of the markets’ tendency to overreact, markets are down 15 to 30 percent. But all of this is temporary. If you maintain the belief that the world will find a solution to this pandemic, which we believe, this will be another case study in why panicked decisions for investors are costly. Investors should maintain perspective on the true effects of this virus and the fact that it is more like the flu than not for the vast majority of the population.”
As of now, no one is diagnosed as presumed positive for coronavirus in Chester County. But the Coronavirus has spread in nearby Montgomery County. As of Monday, 10 presumptive cases of the disease have been reported across the state. Seven are in Montgomery County, and one each has been reported in Delaware, Wayne and Monroe counties.
First the good – this is brought under control by late spring early summer and the global economy starts up again but after a couple quarters of negative growth (a recession) and lost profits for the year in American corporations. For the bad – after a false sense of victory during the summer months and the virus makes a boomerang appearance in the fall and its effects carry into next year before finally running its course a year or so from now. In both instances, as a result of the markets’ tendency to overreact, markets are down 15 to 30 percent. But all of this is temporary. If you maintain the belief that the world will find a solution to this pandemic, which we believe, this will be another case study in why panicked decisions for investors are costly. Investors should maintain perspective on the true effects of this virus and the fact that it is more like the flu than not for the vast majority of the population.
Chester County’s 9-1-1 center is including screening questions for coronavirus when relevant, and the Health Department and Department of Emergency Services have prepped the Emergency Operations Center so that all relevant Health and key DES personnel are working together and fully prepared, should the coronavirus situation in Chester County escalate.
The Chester County Health Department has been holding conference calls for all schools personnel, for all elected officials, and will hold one for the Chester County business community. Chester County Commissioners’ Chair Marian Moskowitz is providing an introductory message for the business community conference call. Chester County Health Department Director Jeanne Casner is taking part in U.S. Rep. Chrissy Houlahan’s Telephone Town Hall Tuesday evening and she is part of a panel for another town hall scheduled for next week with state Rep. Dan Williams.
County officials have put into place a plan if the virus spreads to Chester County. All departments have been tasked with reviewing their Continuity of Operations (COOP) plans and assessing specific requirements and capabilities to carry out those requirements, should alter ways it conducts business with less person-to-person interaction.
And the county is also reviewing its policies regarding work-related and personal travel, meetings, and use of sick time, and this will be communicated to all county employees soon, officials said.
At many retail stores in Chester County, hand sanitizer is extremely hard to obtain as people are using all precautions to avoid getting the virus. At Walmart in East Marlborough, the shelves stocking hand sanitizer and Purell was bare, and nearly everyone washed their hands with the huge jug of hand sanitizer at the entrance.
“You know it’s strange times when your huge collection of half-empty bottles of hand sanitizer looks like a better investment than your 401(k),” said Barry Rabin of Downingtown.
Donolley said Chester Countians would be advised to leave their 401(k) retirement plans alone.
“Shorter term needs, money needed within one to five years, should be removed from equity market risk,” he said. “And it should not have been exposed to market risk before this latest event. Historically speaking, selling in the midst of panic, has been the wrong action to take. We caution against any thought of moving assets to cash or bonds from equities unless there are other life events or circumstances in play. In addition, some advisors would say that moving money into bonds is akin to buying into the equity markets at their all time highs. Bonds have done extremely well this year with interest rates falling so quickly. If we find some stability in the coming months those bonds could quickly lose value.”
COVID-19 is spreading easily and sustainably through communities. The disease is believed to spread mainly from direct person-to-person contact. The virus can spread through respiratory droplets produced when an infected person coughs or sneezes. If you’re within six feet of an infected person there is risk that those droplets can make their way into your mouth or nose and infect you.
