What is the Economic Impact of COVID-19?
Pennsylvania’s version of the CBO released estimates last week. If businesses remain closed through April 30th (6 weeks), they are looking at a $2.7 billion drop in revenues. If the shutdown goes 10 weeks Pennsylvania is looking at a $3.9 billion drop. http://www.ifo.state.pa.us/download.cfm?file=Resources/Documents/Revenue-Update-2020-04.pdf
Nevada has one of the least diversified economies in the nation with 50% of the state’s output attributed to tourism and is facing a potential unemployment rate above 30%. According to analysis by the Nevada Resort Association (a casino-industry trade group) casino companies are projected to lose $39 billion in the next 12-18 months if the casinos stay closed for 30-90 days.
To keep you informed with what is going on in Nebraska, the Platte Institute is releasing a series of reports on the economic impact of COVID-19 in Nebraska. Our FIRST REPORT gives an overview on the impact for the month of March, and we anticipate much better data and insight when the April numbers are released.
I also talked with Gary Sadlemyer this morning on KFAB to discuss the potential budget impact of COVID-19 on the Nebraska legislature and on local governments across Nebraska.
Here are highlights of the report from the impact on Nebraska in the month of March:
- The U.S. Bureau of Labor Statistics reports that 70% of the jobs lost due to the COVID-19 pandemic are in lower-wage industries like hospitality and retail. Economic modeling estimates an impact of $63 million in lost economic activity in Nebraska for the month of March, including lost wages and self-employment income.
- Nebraska state and local sales tax receipts are estimated to have declined by $924,469 in the month of March. State personal and corporate income tax receipts are estimated to have declined $794,501 over the same period. An updated estimate of lost receipts will be available when April data is released.
- Under the current Directed Health Measure, Nebraska’s estimated increase in unemployment as a percent of non-farm employment during March 2020 was 0.98%. The average increase among shelter-in-place states is 2.82%, while the average of states that do not have a statewide shelter-in-place order, including Nebraska, is 1.85%.