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Region braces for economic impact of COVID-19

Jonathan Roberts • Mar 22, 2020 at 11:00 AM

As the stock market tumbles, businesses close and people lose their jobs, it’s clear the novel coronavirus (COVID-19) is already making an impact on Northeast Tennessee’s economy — the question is how much of an impact it’ll have.

“Obviously, this is one of the (most) powerful impacts we’ve seen on our economy from an unexpected source,” said East Tennessee State University economist Fred Mackara. “We’ve had other natural disasters and so forth, but I don’t think there’s been one that’s impacted the economy nearly as much as this one has in a very, very long time.”

Over the past few weeks, businesses and restaurants have closed their doors or significantly adjusted their hours, while major events have been postponed or canceled altogether in response to the pandemic. Alicia Phelps, executive director of the Northeast Tennessee Tourism Association, said that, while COVID-19 will “obviously” have an impact on tourism and the local economy, she’s confident in the region’s ability to recover.

“This region has a strong sense of community and is unbelievably resilient,” Phelps said. “This too shall pass, and when it does, the tourism and hospitality industry will be there to support our local economy.”

Mackara said just how bad things get economically depends on the length of this pandemic, noting that some economic analysts are projecting a “v-shaped recession,” where the economy will drop sharply and rebound in relatively short order. In smaller, local economies, however, the effects of any economic downturn may be more pronounced.

“Unfortunately, I think this region is going to take it pretty hard,” Mackara said. “Again, how long it will last we don’t know, but unfortunately our region could be hit pretty hard by this.”

The list of postponements and cancelations includes the spring NASCAR race at Bristol Motor Speedway — an event that, according to the speedway, has an economic impact in the millions of dollars. Phelps said it’s important to note that NASCAR plans to run the race at a later date, but NASCAR said whether the race is run at all depends on how long the virus remains a serious public health issue.

“It's important to remember that the NASCAR race in Bristol will be rescheduled, and the fans of NASCAR have shown a particular dedication to Bristol Motor Speedway,” Phelps said. “The region will look forward to hosting them when the spring races are rescheduled, as well as in September during the playoff race.”

“We are resilient and I am confident that our industry will remain strong.”

In Jonesborough, a town dependent on tourism and sales tax revenue, the impact of a prolonged fight against COVID-19 could be profound.

“We expect to see an impact, as most do,” said Jonesborough Tourism and Main Street Director Cameo Waters. “We are doing what we can to keep small businesses afloat and encouraging safe ways to support them.”

Walking through downtown Jonesborough, it’s hard to miss the many handwritten signs that hang on the windows and doors of businesses forced to close or reduce hours or alter their business model. Help for small businesses may be on the way though, as Tennessee received an economic injury disaster loan declaration from the U.S. Small Business Administration on Friday.

“I applaud the efforts of the SBA in swiftly processing and approving Tennessee’s request for Economic Injury Disaster Loan assistance,” Tennessee Gov. Bill Lee said in a statement. “Small businesses and nonprofits across the state are suffering greatly in the wake of this pandemic, and these loans will help overcome the temporary loss of revenue companies are experiencing during this difficult time.”

“Our downtown businesses have been working hard to alter operations by finding creative ways to still provide their services,” Waters said. “Many of our shops are offering curbside pick-up, delivery, and online shopping, and we’re encouraging folks to take advantage of this as well as suggesting gift cards purchases to use at a later date.

“It’s inspiring to see our favorite shops in Jonesborough striving to still provide any bit of normalcy to residents and visitors.”

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