The omnipresence of pandemic media fodder has become fatigued for the public.
The bombardment has been so effective that people are either tuning out or sheltering in place. With vaccine distribution imminent, and a large scale role out within two quarters, market indices have moved past the devastation of the period and are focused on the recovery.
The residual blight of this experience will be a loss of traditional freedoms, obstructed interaction and the casual comfort of mask-less facial observations to endearing greetings like handshakes and hugs.
A more insidious remnant of the pandemic will be changes in economics: carnage to business, displaced labour-market skills, an asymmetric recovery and accumulated public debt (debt which will continue to compound, even as bond yields/interest rates modestly increase).
Our former economy is forever transformed. Forged through necessity, consumer habits have been conditioned resulting in adaptation to how goods are accessed and enjoyed. The pace and ferocity of this pivot have been greater than most businesses will have the perseverance to endure. Those that deconstructed their business model can strain to see through hyperopia, an improved economy by 2022.
Life is resilient and finds a way to recover after devastation, and new entities will emerge, new opportunities will present, but unanticipated carnage awaits the unwitting.
What can we anticipate in the short run?
It’s my belief that 2021 will be a year of stabilization and reconciliation. It will not be a period of recovery; meaningful growth is unlikely for eighteen months.
Governments will apply financial lubrication as a means of enduring this disruption. Our provincial government just released a capital budget of roughly double recent investments ($196 million), while the federal government has announced an unprecedented, prelection style, budget of an astounding $381 billion deficit.
Some of these monies will have been misapplied. Some will be used to construct counter-productive new bureaucracies in haphazard and rushed ‘solutions’. But much of the investment will be used to restore confidence and to establish a floor of recovery.
Investment is unquestionably necessary, anticipating the moment to taper is the challenge. Refurbishing aging infrastructure will occur as an old-economy stimulus action, but consideration of creative-destruction and reimagination is also required, and commonly absent in policy.
Vital links of our economy, such as transport corridors energy independence and air transport need dedicated monitoring and attention. The latter being my greatest concern to the vibrance and vitality of a recovering economy. Our air links are under some threat, and governments need to commit to this infrastructure.
Black Friday and Cyber Monday have just completed with estimates of record surges in online consumption up 22 per cent. Despite the obstacles of shopping in person, be conscious of the challenges local retailers, restaurateurs and service providers are facing. As they struggle to maintain a presence, support their community and employ your neighbours be aware they are not poised for profitability in 2020 or likely 2021. A pillar of the recovery will be our local entrepreneurs, if we lose this resource any recovery will be more complex.
Islanders are resilient and well-conditioned for seizing the opportunities for recovery. Patriating population to refocus on global connections, offering our output to an eager and recovering market. Core infrastructures of business, transport/travel and creativity must be nurtured and preserved as we eye a formal emergence from the pandemic cloud.
Our governments will not lead our economy through recovery, enterprise will. The government can provide some supports, but we have to quickly break free of the shackles that constrained business. If equity indices are a forecast into the future, companies must position now for the emergence, because it would seem to be projected to be underway.
Blake Doyle is The Guardian’s small business columnist.
