By ANDREW DUGUAY
The answer hinges on the proverbial new normal we keep talking about. Initially, we as a society held our breath through the shutdown, waiting for things to go back to normal.
As the health crisis has continued, however, consumers adopted new behaviors that could extend into this “new normal.” Consumers are ordering their groceries online, they’re working remotely, and they’ve grown more comfortable with telehealth. How many of these behaviors persist could have long-term implications for the oil and energy industry.
Don’t Just Look at the Number of Covid Cases, Look at the Response
The coronavirus has cascaded across the U.S. from region to region and state to state. As a result, states have experienced vastly different trajectories. Most seem to have the worst behind them while others are still contending with high numbers of new coronavirus cases. Where they are in the cycle of the pandemic has a bearing on economic prospects, but their response to the pandemic may have even greater bearing.
For example, New York, once the epicenter of the pandemic, has effectively flattened the curve, but it’s come at a steep price. One-third of restaurants in New York are likely not to reopen after the pandemic. New Yorkers, having long coped with an exorbitant cost of living, are leaving the city in droves .
Texas, by contrast, is in the thick of the pandemic, but is not experiencing the same economic woes because the state hasn’t enforced restrictions as severe as New York’s. Having said that, Texas is also dealing with an increased number of cases because of lax restrictions, which could have economic consequences moving forward.
Winners and Losers of the Pandemic
This pandemic-driven recession has created winners and losers. Some industries have found new growth opportunities while other industries have cratered. Some states, like Utah and Arkansas, are not currently experiencing recession while other states are reeling from economic shutdowns.
This uneven distribution of economic gain and hardship should encourage businesses to pay special attention to state-specific and industry-specific indicators in planning for the remainder of 2020 and into 2021.
Approaching this economic event as a series of micro-recessions and micro-recoveries will help you collect more relevant, actionable data, and could be the difference-maker that ensures your business ends up in the winners column.
Andrew Duguay is the chief economist at Prevedere, an industry insights and predictive analytics company .