Jack Heath: Region likely to reemerge stronger following pandemic
Finance industry, its clients face challenges; exhibit perseveranceFebruary 11th, 2021
Congratulations to the Journal of Business for 35 years of service to the Spokane business community. It seems like such a short time since I last wrote on the Journal’s landmark 30-year anniversary, yet there’s been so much change since then. 2020 was a daunting year for all of us, and it was certainly one that none of us could have predicted.
Despite the challenges that rocked our business community, I am optimistic about our region’s future and that we are positioned to build back stronger than we ever have been before.
At the onset of the pandemic, everything quickly changed, with gross domestic product plummeting from 2.9% growth in 2019 to negative 31.4% in the second quarter of 2020. The economy was locked down, and the Federal Reserve and Congress quickly revised fiscal and monetary policy, while approving a total of $4 trillion in economic stimulus.
Working in the banking industry provided me with a unique perspective to see firsthand how the pandemic affected Spokane businesses across a variety of sectors. Some rebounded quickly; others took a grave loss.
The financial community reacted quickly to inject funds into many local businesses. As an organization, we funded over 5,000 Paycheck Protection Program, or PPP, loans to companies employing more than 100,000 people. Still, for some industries, there was no amount of PPP funding that would have offset this economic catastrophe, and as a result, we lost some of our favorite local businesses.
The hospitality, entertainment, and travel industries bore the brunt of this pandemic. They are feeling the financial pressure and need to reopen, and there is pent-up demand for people who are ready to return to travel and entertainment as soon as possible. We are going through a challenging economic time as a business community, but there’s light at the end of the tunnel.
Flexibility is key
I have seen exceptional resiliency from the local business community that gives me great hope in our future. Most businesses had to pivot their business models quickly and efficiently, repurposing their production lines and workflows to accommodate work-from-home models and making exceptional changes to create valuable offerings for their customers.
Our community rallied around challenged businesses and focused on buying local and ordering food to go from their favorite neighborhood restaurants.
As market trends continue to indicate, increases in home and land prices in major urban centers will benefit our region. There is a new wave of workers who can move and work from home. They are looking for an incredible quality of life in an affordable place to live and raise a family.
Our region is poised to continue to receive an inbound of well-educated workers from major metropolitan areas, and we hope their companies will follow and drive economic growth.
GDP has rebounded from minus-31.5% in the second quarter to plus-4% in the fourth quarter of 2020 and minus-3.5% for the full year. Far better than what was forecast when the crisis first hit.
Drive around Spokane, and you can see the signs of the economy recovering in real time as construction activity is clearly visible. It fits the old adage that out of crisis comes opportunity.
In the post-COVID-19 environment, we will see that many companies and their employees operate in different ways. They have reshaped the way we work and have evolved in a very dynamic world. Those will be positive changes that allow more flexibility and efficiency for the way we work together in the future.
I am grateful for the exceptional, fact-based reporting that the Journal tirelessly provided our community to help us through one of the darkest economic periods we have ever faced.
Throughout this ordeal, exceptional reporting was a crucial component to weathering the storm.
The Journal tirelessly worked to keep the business community up to date with essential information that impacted businesses and adapted quickly to change its operational structures to accommodate new conditions set forth by the pandemic, while still creating an exceptional product offering that has continued to be relevant.
In times of unprecedented change, the Journal has been a stalwart north star.
We are excited to raise a (virtual) glass to the Journal to celebrate its 35-year anniversary, and we are awaiting the day soon when we’ll celebrate this achievement in person, together.
Jack Heath is the president and chief operating officer of Spokane-based Washington Trust Bank.