Economist: Coronavirus Could Spark Recession That Would Be Especially Bad In Inland Empire
More and more economists are openly worrying that the coronavirus epidemic could plunge the U.S. into a recession. If it does come to that, how would it play out in the Inland Empire?
Dr. Manfred Keil is the Chief Economist at the Inland Empire Economic Partnership.
He says a potential recession would be very bad for the logistics industry, including the many warehouse workers whose livelihood depends on goods coming through the ports.
Keil: “And basically, the idea is the following: so as far as the Inland Empire is concerned, you have to realize that this is the number that surprises people sometimes. Forty percent of all U.S. imports, not just from China, all of the imports into the United States, forty percent of them comes from two ports: those are the ports of Los Angeles and Long Beach. It is hard to store things around the area, it is very much built-up, this is where the Inland Empire thrives, so basically the warehouses and logistics sectors are where things get re-assembled and out into the so-forth and so-forth. And that is heavily impacted by imports.”
But that nightmare scenario for workers isn’t the only option. Keil says coronavirus cases could peak, in which case there would be only a slight disruption to the Southern California economy.
Keil: “The new cases worldwide peak at the end of this week and everything will be under control by the end of April. In that case, there would be perhaps a one-quarter glitch in GDP, particularly in Southern California and the Inland Empire, less so for the United States as a whole.”
Keil says we will see which scenario occurs in the following weeks.