ORLANDO, Fla. – Despite Central Florida businesses shuttering or scaling back operations and the indefinite closure of the area’s major theme parks, a local economist predicts a swift rebound once COVID-19 is contained.
“What we have right now is not a traditional recession that is born out of the natural movements of the economy,” said Dr. Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting. “This really has nothing to do with businesses getting nervous about expanding and wondering if the demand is going to be there and start pulling back, and the sort of psychology that feeds into a natural recession. The lights got turned off by virtue of public health orders.”
As long as most businesses can reopen by late April and there are no further virus-related shutdowns, Snaith said he believes Central Florida will fare much better than it did following the 2008 financial crisis.
“The housing market collapsed. And the burden of that collapse weighed down on Florida’s economy for years after the recession came to an end," Snaith said. “Here, depending on how long these stay at home orders and various shutdown orders are in place, we could bounce back very sharply once we get to the other side of the pandemic.”
While many furloughed or laid-off workers may be asked to return to their jobs as soon as employers resume normal operations, the economist warns that not all positions will be filled immediately.
“There is probably a level of staffing they’re going to have to get to very quickly to maintain the type of service their customers expect,” said Snaith. “Will they go from zero back up to 100 percent in a matter of a few days? Probably not. I think the prudent thing would be to see just how the economy is, in fact, bouncing back.”
Snaith points out that Central Florida's tourism economy rebounded quickly following the 2008 recession due, in part, to demand for the area's leisure activities.
“Especially when that pent up demand is being generated by being pent up in your house, people are going to be ready to get out,” Snaith said. “But what’s going to be important is that people get back to work. Nothing shakes consumer confidence like not having a paycheck.”