CHARLOTTE, N.C. (WBTV) - COVID-19 is taking an unprecedented hit on the economy, both nationally and locally.
UNC Charlotte economist Dr. John Connaughton gave his quarterly outlook on Thursday.
Forecasting the state of the economy is a tough thing to do right now because there is so much uncertainty.
Dr. Connaughton said job losses will continue, and he does not see North Carolina’s economy bouncing back to the way it was in December 2019 for at least 1 1/2 years.
“Bottom line here is this, we’ve taken the biggest hit that the economy has taken since the Great Depression of the 30s," Dr. Connaughton said.
Dr. Connaughton said consumer confidence is key.
“In February, it was 130.7. We’ve had basically a 33 to 34 percent drop to 85.7,” he said.
More than 600,000 jobs were lost between February and April statewide, but he believes half of those will be back by the end of the year.
Leisure and hospitality services were hit the hardest.
“One of the things Charlotte has in its favor is the high percentage of workers that are in finance, insurance and real estate industries, and that helps because it was not hit as hard in terms of jobs lost," Dr. Connaughton said.
WBTV asked how the commercial real estate industry could be impacted by this if businesses work from home and do not lease office space.
“We’re going to see that change," Dr. Connaughton said. "We will probably start to see some business firms become flexible. If they call their workers back itll be on a day to day basis to maintain social distancing.”
In lower paying jobs, employees may choose not to go back at all.
"From the worker’s perspective, they are making more money than when they were working, and there’s no risk at home,” he said. “It will be very hard for employers to do anything about employees collecting higher wages by being unemployed.”
WBTV also asked whether the potential of a second outbreak would keep companies from investing right now.
“We’ve already seen some of that,” Dr. Connaughton said. “We know a number of firms are cutting back. We don’t know how it will affect us six months from now or a year from now.”
Dr. Connaughton said that the uncertainty is not going away.
“How quickly we recover is not going to be based on politicians or orders, laws or anything,” Dr. Connaughton said. “It will be on whether consumers and workers choose to participate in the economy again.”
Dr. Connaughton also said that one sector benefitting from the coronavirus is online retail, but it also threatens the future of brick and mortar stores.