COVID-19 Economic Impact on the Printing Industry
When will the contraction moderate? When will recovery begin? And what kind of recovery can we expect? It all depends on when propagation of COVID-19 slows enough to ease social distancing. Even the world’s leading epidemiologists can’t put a date on that.
We do know that our margin for error is exceedingly thin. The longer we keep the economy locked down, the greater the risk of moving from recession to depression. But open up too early, and we risk even wider and more rapid spread of COVID-19.
We also know that testing is the answer. We’ve come up terribly short there. But tests far superior to what we have been using are on the way. They will be easy to administer, producing results in hours or even minutes, not days. One will identify the infected even before they show symptoms, while another will identify those who have developed immunity. Administering the tests to statistically significant random samples of the population will yield the facts and risk assessments we need to best decide when, where, and how quickly to liberate the economy.
On the economic front, it’s all about aid and stimulus, both fiscal and monetary. The $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) correctly focused on job #1: get households and business a lifeline. We discussed the specifics in previous posts: the Paycheck Protection Program to provide government-guaranteed loans with forgiveness provisions to small business; cash payments to approximately 140 million Americas; and substantial expansion of unemployment insurance, including increased benefits, wider eligibility, and suspension of waiting periods and work-search requirements. Expect key provisions, including small business loans — $377 billion isn’t going to be enough — and loan forgiveness, to be enhanced and extended.
Work on a stimulus package will begin April 20, when Congress returns from recess. Additional aid to state and local governments and to public health (the CARES Act provides about $340 to the former and $154 to the latter); expansion of family and medical leave provided in the Families First Coronavirus Response Act; and investment in a broad range of infrastructure, including broadband, energy, transportation, housing, schools, and water purification, have bipartisan support. Additional proposals include a payroll-tax holiday, expansion of the Earned Income Tax Credit, and expansion of tax credits for child and dependent care. Deregulation to promote quick, efficient spending of the stimulus funds will also be considered. We’ll discuss the proposal in future posts as its details emerge.
Andrew D. Paparozzi joined PRINTING United Alliance as Chief Economist in 2018. He analyzes and reports on economic, technological, social and demographic trends that will define the printing industry’s future. His most important responsibility, however, is being an observer of the industry by listening to the issues and concerns of company owners, executives and managers.
Previously, he worked 31 years at the National Association for Printing Leadership. He has also taught mathematics, statistics and economics at various colleges.
Andrew holds a Bachelor’s degree in economics f rom Boston College and a Master’s degree in economics — with concentrations in econometrics and public finance — from Columbia University.