New economic impact numbers have been released and according to the Huntsville Madison County Chamber of Commerce Research Director Ken Smith, they provide a snapshot into exactly what kind of impact COVID-19 has had on our local economy, and how that information compares to the national numbers.
While there is some bad news in the data, albeit expected; there is quite a bit a good news going forward as Huntsville proves to be overwhelmingly resilient.
According to Smith’s presentation on a recent teleconference call with Chamber members, there was a big dip in employment coming off March into April with Huntsville employment at 226,000. The one-month change showed an 8.3 percent dip, which Smith said is a significant drop. However, compared to the U.S. employment numbers of -13.1 percent, Huntsville stayed well ahead of the national statistics.
Furthermore, according to early calculations for May, employment has already started ticking back up, showing a 2 percent increase in employment from April to May.
“We are looking at what analysts are saying is a two-year recovery for GDP and a possible three-year recovery for employment to get back to pre-pandemic levels,” said Smith. “We are about 7.5 percent below where we were this time last year, as compared to 13 percent for the U.S. economy. That translates into 10.6 percent unemployment locally, which is a big jump, but not bad when compared to the U.S., which was up to 14.4 percent.
“The Federal Reserve recently announced they are not likely to raise interest rates until after the year 2022. So this gives us hope and a sign it will be the same for the local Huntsville economy, and it will rebound, which falls in line with what the Federal Reserve has been predicting.”
Looking at the two-year picture, backing up to January 2018, the numbers show the precipitous drop in April wiped out any gains over the past few years, and the same can be said for the U.S. economy, which lost 20,000,000 workers over the past month. It added back 3 million in May.
“We at the Chamber use trends in our marketing to potential new clients interested in moving their business into the area,” said Smith. “They like to see that our economy is strong.
“If you look out over 20 years instead of two years, you can see Huntsville’s employment growth is about twice the rate of the U.S. and it has been trending that way since 2000.
Smith’s data charts show the dip in 2008, which was the recession. It took Huntsville about five years to recover and get employment back to pre-recession levels. It took the U.S. six years.
“But what they’re predicting now is a larger drop but a shorter recovery,” said Smith. “That is a three-year recovery in employment and four years for the U.S. to recover.”
Looking at employment by industry, there are no surprises.
The biggest local job loss was in the leisure and hospitality industry, losing 8,000 jobs from March to April. That includes all the arts, entertainment, and recreation, and hotel and food services.
The second biggest loss for Huntsville was in professional and business services.
Huntsville lost 4,100 jobs during that same time period, and where engineering and technology workers did not see a big job loss, the losses were in support services such as office and administrative, cleaning services, document preparation, and employment services. With companies closed or people working from home, there was a lot less need for some of that support.
The third largest drop was some 1,500 jobs in a sector that included repair and maintenance businesses, hair and nail salons, and nonprofit organizations.