How do we get out of this mess? We will recover.

By Michael Randle, EDITOR

In 40 years in the journalism business, I have never covered anything like the coronavirus and its economic effects on not only the U.S., but the world. I have never seen this level of mass layoffs and furloughs by companies both large and small. It is an economic nightmare, a total meltdown. . .mainly because it happened so quickly. Ten million people filed for unemployment in two weeks, a historical record.

We went through a similar situation with the U.S. economy in the Great Depression and the Great Recession, but not this suddenly —  the Coronavirus Recession. Compared to the Coronavirus Recession, the Great Depression and Great Recession were slow bleeds.

I am writing this in the first week of April, so I cannot predict how this virus will affect the South's economy or for how long. Yet, I can predict this: there will be a recovery and since this recession is not a typical one — unlike the last recession which was based on a lack of liquidity — the recovery will be strong. So, ask yourself, am I going to be ready for the opportunity that the coronavirus recovery will present?

I judge an economy by economic development project activity. Unlike an economist, I do not judge an economy by real-time data, rather by projects meeting our thresholds each year.

We have spreadsheets on every project meeting or exceeding 200 jobs and/or $30 million announced in the 15-state American South since 1993. In every year, the total number of projects has reflected exactly how the economy was performing in the South.

For example, in the go-go '90s, 1997 peaked in project activity meeting our thresholds with a total of 636 deals. In the recession of 2001, there were only 409 projects announced. In the Great Recession years of 2007-2009, project totals did this: 510 in 2007; 429 in 2008 and 367 projects in 2009 (the all-time low of our annual ranking called the SB&D 100). Do you remember what people were saying during the Great Recession? They called it the "new normal."

But they were wrong, waaaaayyyyyy wrong. In 2010, the first full-year recovery of the Great Recession, project activity blew up with 596 deals. That’s an increase of 229 projects in one year, the largest one-year increase in SB&D 100 history. Was your economic development agency or the business you own prepared for such an unlikely recovery? I would guess that 75 percent were not.

Then we have this 11-year recovery that ended with the Coronavirus Recession. This 11-year recovery peaked in 2015 and 2016 with 730 and 695 deals respectively making our ranking. I would imagine this year will end up with something like what we saw in 2009.

If you think there may be no deals out there in April and May 2020, you are probably right. However, my prediction is this will be a V-shaped recovery. That means a collapse of projects with a short pause, then a dramatic increase in project activity once the all-clear is announced.

I see some of you canceling your marketing and advertising (at this writing, there are no conferences to attend anyway) and my advice to you is don't. A strong recovery is coming. Is your business or economic development agency ready for the recovery? And don't worry about the election. The recovery will happen no matter who wins

Correction: Toyota’s North American headquarters is in Plano, Texas and Nissan’s headquarters is in Franklin, Tenn. We had Toyota listed in the Dallas-Fort Worth MSA and Nissan’s in the Nashville MSA in the last issue. Both plants are in those MSAs.