Long Island’s economy will begin to rebound from the coronavirus-induced recession in the second half of 2021 when a vaccine becomes widely available, a local economist said on Tuesday.
John A. Rizzo, chief economist for the Long Island Association business group, predicted that companies would begin investing in operations and hiring workers in the July-December period. However, economic activity will be slow in January-March as the number of virus cases climb and nonessential businesses potentially are shut down for a second time, he said.
Small business owners "can expect a better second half" of 2021, said Rizzo, who also is a Stony Brook University professor. "The first quarter [January-March period] could be challenging because the virus will be spiking and that may necessitate further lockdown measures" of businesses.
"But there is a light at the end of the tunnel and there’s a time frame because of the news about the Pfizer vaccine," he told a virtual meeting of the LIA’s small- and mid-sized business committee.
Pfizer, the pharmaceutical giant, and its partner BioNtech in Germany, announced Monday that their vaccine may be more than 90% effective against COVID-19, based on preliminary results from late-stage tests.
Asked about the impact of New York City residents moving to Long Island, Rizzo said that home sales will continue to be robust while office buildings will struggle to find tenants.
"A number of businesses have found that their workers can work remotely and it's cheaper for them," he said. "Office space on Long Island is going to be reconfigured."
Rizzo, echoing the advice of Federal Reserve chairman Jerome Powell to Congress and President Donald Trump, said that additional stimulus checks for individuals and loans for small businesses are needed to propel the economic recovery.
"The economy would do better over the next six to nine months if we get some continued [federal] support, not only for consumers, but also for small business," Rizzo said. "Consumer spending is 70% of GDP [gross domestic product] but to have spending there have to be jobs and businesses providing them. It would be counterproductive to support one sector and not the other."