“Main Street businesses, even if allowed to open under strict restrictions regarding customer interactions, won’t really come back until the consumers do,” Knapp said. “And right now, the polling suggests that the public and small business owners are still very afraid to resume normal activities.”
Spartanburg Herald Journal
May 6, 2020
By Bob Montgomery
Staff Writer
It only took a few weeks to shut down much of South Carolina’s economy, but it could take much longer to recover after the number of COVID-19 coronavirus cases and jobless claims drop.
“There’s the social hangover effect,” said Joseph Von Nessen, research economist at the Moore School of Business at the University of South Carolina. “Until people feel comfortable, we’re not going to see the economy get back to what we would consider normal.”
State health officials first said the peak of new coronavirus cases would be late April or early May. This week, they revised projections to show an increase in cases through at least May 23, and for the death toll to continue rising through early August.
Since early March, the S.C. Department of Employment and Workforce has reported more than 400,000 new jobless claims, although last week was the second straight weekly drop in new jobless claims.
The best-case scenario is that health experts say it’s safe to reopen businesses and people to return to work gradually, still using safety protocols, Von Nessen said.
Even then, it will take time for people to readjust to their routines.
At worst, the virus continues to spread, or re-emerges in the summer or fall, and more businesses are forced to close or declare bankruptcy.
“That could set up another run of layoff activity,” Von Nessen said.
“We really don’t know,” he said. “Uncertainty is very high right now. We can make basic projections for the second half of 2020, but all that assumes is we don’t have effective (COVID-19) treatment in place yet. If we do, that could be a game changer.”
Restaurants have been hit particularly hard since restrictions took effect in mid-March.
However, they are among the first businesses allowed to reopen.
Friday, Gov. Henry McMaster announced state parks were reopening, the stay-at-home order over the coronavirus will end this week, and that restaurants Monday could begin serving people at outdoor tables as long as strict distancing rules are followed.
Still closed were indoor dining at restaurants and businesses that have close contact with people, such as hair salons.
“The governor has begun to allow some businesses to reopen on a limited basis,” VonNessen said. “This is a trial run to test the degree that social distancing can be made, and allowing them to create a positive track record for the business and themselves.”
Building a solid track record based on safety precautions is important to restore consumer confidence, according to Frank Knapp, president and CEO of the S.C. Small Business Chamber of Commerce.
“Main Street businesses, even if allowed to open under strict restrictions regarding customer interactions, won’t really come back until the consumers do,” Knapp said. “And right now, the polling suggests that the public and small business owners are still very afraid to resume normal activities.”
Meanwhile, the Upstate is home to many manufacturing companies that have halted production and laid off or furloughed workers. The largest, BMW Manufacturing, planned to resume production Monday.
Coastal communities are heavily dependent on tourism, which has also taken a huge hit with beach closures and businesses closing.
“Both industries will come back over time,” Von Nessen said. “There are many competitive advantages manufacturers have being in South Carolina, and those advantages haven’t gone away. We expect manufacturing to come back in a very bright way.”
Allen Smith, president and CEO of the Spartanburg Area Chamber of Commerce, is also optimistic.
“Predicting when the national economy will return to pre-coronavirus levels would be a fool’s errand, but we have great reason for a quicker recovery locally,” Smith said.
Many small businesses operate on thin profit margins, he said.
“The challenges of our small business community keep me up at night,” Smith said. “Many of these businesses went from the top of the mountain to the bottom of the valley in a matter of days.
“Every report we can gather indicates the end of federal government small business support once the second round of the paycheck protection program is exhausted.”
To help, Smith said a task force has been formed for Spartanburg’s recovery, similar to the state’s accelerateSC.
David Britt of Spartanburg County Council and Kay Woodward of J.W. Woodward Funeral Home have agreed to co-chair the “Bringing Back the Burg – Business Recovery Task Force.”
The task force will meet weekly, and will stream weekly messages on the chamber’s Facebook page. The first message will be at 10:45 a.m. Thursday, with Spartanburg Regional Healthcare System CEO Bruce Holstien.
There will also be a virtual question and answer people with human resources managers via Zoom at 2 p.m. Thursday. At 10 a.m. Thursday, May 14, a Zoom session on how to avoid online scams is planned.
“More to come on that front, but this group will guide and advise business and elected leaders through the process of reviving Spartanburg’s economy as quickly as possible,” Smith said.
Meanwhile, some businesses have actually done better during the coronavirus shutdowns.
Joe McMichael, manager of the Hot Spot convenience store at 194 E. Henry St. in Spartanburg, said beer sales have gone up 25 percent in the past month and half due to restaurants and bars being shut down.
Some snacks are selling out quickly, like chips and snack cakes. Others are running out because the manufacturers have shut down or scaled back because of the virus, he said.
“Oreo Double-Stuf cookies have been sold out for two months,” he said.
Overall, he said customers have been patient and understanding, as well as doing their part to social distance and wear face masks.
“Part of it is South Carolina resilience,” McMichael said. “We’re not panickers — except with toilet paper.”
This content is being provided for free as a public service to our readers during the coronavirus outbreak. Please support local journalism by subscribing to GoUpstate.
https://www.goupstate.com/news/20200506/upstate-economists-expect-slow-recovery