(upbeat music) - Hello and welcome to The Journal, I'm Steve Kendall.

The coronavirus pandemic has had serious impacts on local economies.

I wasn't going to compare it to recessions and down dips in the economy we've seen in the past, and how does the recovery in 2021 look.

To talk about that, we're joined by two people who are focused on the local economies.

Denise Dahl, owner of Epiphany Planning & Development LLC, a company that specializes in people in business development, And Matt Gilroy, the president of the Northwest Ohio Regional Economic Development Association, and also the executive director of the Fulton County Economic Development Corporation.

So, Denise and Matt, welcome to The Journal today and thank you for taking the time to spend with us to talk about how things are gonna look in the economy as we move into 2021.

When we look at 2020, what are some of the impacts and what are some of the serious impacts that we've seen with regard to our local economies?

- Well, specifically to Fulton County, Steve, I think one of the most negative impacts has been in the retail and service industries on a local level.

And that was primarily during the months of April, May, and even into June.

But we saw a very quick recovery.

Actually, our sales tax numbers by the end of the year were equal to or better than 2019 numbers.

So we were able to see a recovery.

Besides the months of April and May, the manufacturing sector here actually went right back into work and was very productive to the extent that most manufacturing companies were hiring people by the end of the year.

- Yeah, I agree with that.

Brookings Institute came out with a study in January of this year actually comparing a few different cities and comparing the industries of whether you're moving technology and product or if you're moving people, right, as in travel or hospitality.

And I don't think it's probably a big shock to any of us that if you were trying to move people, your industry had a hard time recovering and still is, but it also kind of spoke to the whole reality of, what geography played in the whole situation and whether urban versus rural, what gender played, race played, generations, I think, really, we're gonna see that long term, the outcome, based on what generation you're within during this whole situation.

But I do agree with Matt, especially compared to 2009, that the bounce back this time has been much quicker so far and I anticipate that it will continue to increase, I know.

I read a study recently that manufacturing hours per week are the highest that they've been since 2018 so I think that's a significant positive sign.

Some of that might be attributed a little bit to automation in our area, but I think overall, on average, it does show that the bounce back this time compared to 2009 is very, very different.

- Yeah.

And that's interesting because we've tended to hear that, oh, there gonna be a lot of jobs that will never come back, and especially in the service and retail industry, but it sounds like at least in the areas that you guys are talking about, that has not been the case, that things have really come back in a much faster pace so that's good news for everybody then.

- Yes, I think on a regional basis, that is the case as well throughout Northwest Ohio.

Now there are pockets of specific businesses or specific industries that may have a more difficult time to recover.

For instance, Cedar Point and some of the large amusement parks and places like that to where people tend to congregate especially during summer months, we're not exactly sure where 2021 is going to end up in terms of the vaccinations and what that's going to do to those types of industries.

Certainly beyond the vaccination process, people I think are itching to get out and do things again so hopefully we'll see a fairly quick recovery.

But I have a feeling that in travel and tourism, entertainment and recreation, that recovery might look a little bit different.

- Yeah, I agree with that.

And that's not to say that there wasn't a lot of pain in 2020 'cause there was.

I own my own business, it was not a relaxing time in March and April, when you really couldn't even predict what was gonna happen, it was a day to day kind of thing.

But I know companies like Delvin Construction, they grew last year.

So you did see some growth, I think like Matt referenced with tourism and travel.

Like there are definitely some very clear winners and losers and there are definitely a lot of people that took a huge hit.

But again, compared to 2009, it won't hopefully be that brutal long term pain that we experienced then.

- Yeah, and I guess it is probably a simplification but there is, I think as Matt said, there is probably some pent up demand especially when it comes to the hospitality industry, people wanna travel again, they wanna be able to go and take vacations and go to places like at Cedar Point or those sort of entertainment venues like that.

Well, the whole concert industry of course was shut down completely and that's a big driver in a lot of areas and ours too when you look at some of the venues around here.

But it's interesting though that the recovery is different than what we saw back in 2009.

Is there a reason yet that we can figure out why that is or it's just simply that we're still trying to figure out exactly what's been going on and what's going to go on.

- [Matt] Go ahead, Denise.

- Okay, thanks, Matt.

I think a piece of it is the psychological component.

Businesses that I've worked with and helped, whether it was to the whole PPP process or some other incentive or just stabilizing and trying to move forward, the psychology is very different.

In 2009, the psychology of a lot of businesses were, I'm a failure, what did I do wrong, I should have been able to plan for this, I should have projected and predicted, blah, blah, blah, based on markets.

This go around, since it is so well, like it's just widespread, right?

It impacted everybody.

There's more of that attitude of, it happened to me, it's not my fault, it was more widespread, there are more tools I can use to dig up out of this.

So it was more of a bootstrap up mentality more than that, how could I've not seeing it coming mentality, if that makes sense.

- Right, right.

Yeah-- - And I think those that are in the goods producing sectors, their recovery has been much quicker and that's very different than 2008/2009.

And that has translated into some odd things that have happened in the marketplace.

And to give you an example, in Fulton County, there is a business that makes and assembles different types of parts for motorcycle equipment.

And they've had a very good year that's allowed them to expand their operation.

And basically, one of the things that has happened is, by virtue of people not going to restaurants and not spending money on services, they've saved a little bit and they're putting that towards the purchase of goods.

So, we've seen manufacturers do well and we also have seen a tremendous uptick in distribution and logistics transportation related to people buying products to basically be mailed to their home.

- Okay, well, when we come back, let's talk a little bit more about some of the stories like that that are maybe surprising successes because of the difference in this sort of slowdown in the economy versus the more typical recessions that we've had.

Back in just a moment with Denise Dahl and Matt Gilroy here on The Journal on WBGU-PBS.

Thank you for staying with us here on The Journal.

Our guests are Denise Dahl of Epiphany Planning & Development LLC, and Matt Gilroy, the president of the Northwest Ohio Economic Development Association, and also executive director of the Fulton County Economic Development Corporation.

One of the surprising things in that first segment to me anyway, was the fact that there were companies that were successful beyond and actually benefited to some degree because of this unfortunate thing with the pandemic, and other companies that did take hits through no fault of either one, just simply because of the way this sort of played out.

So, Matt, talk about a couple of the success stories out of Fulton County that have come out of this that might surprise us maybe.

- Well, what we saw is in the construction industry, for example, because of the CARES Act, there were monies that were put into place for school districts and other types of institutions to fix ventilation systems and so on.

So construction from that regard as well as from the regard of being called into businesses to help separate people because obviously, social distancing has become a term that we all are very familiar with.

So, for the most part, construction that well.

What I saw, for example, from other businesses, Fulton County is very grateful that we host Sauder Woodworking.

They are our largest employer in the county.

And when people are working from home, they need office furniture to do so so Sauder Woodworking and manufacturers like that did pretty well through the pandemic.

And ironically, the automotive industry did pretty well as well.

If you go back to 2009, auto sales in the United States fell to about 12 million vehicles over a year.

Last year, it was about 15.5 million, that was about a million less than 2019.

However, there were two months where production was essentially shut down in the automotive sector.

So, by the end of the year, the third and fourth quarter, auto sales were actually up compared to 2019.

A lot of that was probably driven by the stimulus funds that the people were getting.

- Right.

Well, and that was gonna be a question too is, how impactful were those various stimulus packages that came out?

I mean, it sounds like they did provide some actual stimulus to what people wanted to do with that money.

- Yeah, absolutely.

In my experience, I mean, for my business, that was the pivot we took, right, was helping people through those incentives.

I know in Ohio alone, $18 billion through 2020 went out in payroll protection loans.

So that's a significant amount.

But what I find really interesting when you compare it to 2009, there were these bailouts, but they weren't as widespread, right?

- Right.

- Where in this case, about 148,000 of the PPP loans that went out in Ohio went to businesses with 13 or less employees.

And I think that created a significant substantial sustainability that really, really helped both physically and psychologically.

And then there were these other items I found like extremely interesting that Matt might wanna talk about a little bit that like Fulton County itself created its own little fund which I found really, really interesting.

- Oh, yeah.

Because locally, there have been plans in place or money that's come in place too that have helped businesses as well, right?

Is that right, Matt?

- That's right.

So actually, there were two different programs that we created in Fulton County, one, the Fulton County Commissioners took some of the CARES Act funds that were distributed to local governments and created a small business program where small businesses under 10 employees could get a grant from the local government to just cover the random costs that they had and help with cash flow.

And then, early on in the pandemic, my office created a fund, basically, we went out and raised money from business people that were actually doing fairly well in the new market that was kind of formed after the pandemic for a brief period of time.

And we took those funds and created a low interest loan program to small businesses to use for mortgage payments, rent, utilities, et cetera in the months of April and May.

And that program was very successful.

When we received those dollars back, we're going to be donating them to a nonprofit organization that provides health care equipment in Fulton County.

So, it was a win-win-win kind of scenario.

And it really, due to people's generous nature through the pandemic, was a very easy type of program to implement.

- Yeah, now, as you look at 2021, and this is where you're up, I'm gonna ask you a question just sort of off the top.

What do you think if you look at areas you're gonna need to focus on in 2021, are there areas you believe that, okay, they're gonna need a little more assistance this year than maybe they did last year?

Will there be a shift in maybe how that money is spread out in 2021 versus 2020?

- Absolutely, I think there needs to be at both the state and federal level, and really even the local level, a targeted focus on specific industries that are more challenged now and likely to be more challenged in the near term, specifically, the hospitality industry.

- Right.

- When it comes down to it, Fulton County, our primary visitor type of business is Sauder Village.

- Right.

- They typically in a normal year have about 250,000 people that visit their museum.

And obviously last year, that number was significantly decreased.

And this year, it looks like if we can't get vaccinations quickly enough before the summer months, they're probably gonna have a much more challenging year than what they may have expected as we all started to think about vaccinations and kind of getting back to normalcy.

So, I think places like that, the policymakers should definitely try to figure out ways to be supportive of those types of businesses.

- [Denise] Yeah.

- And also, we're kind of at a point in time where we're not exactly sure what's gonna happen with, for instance, the restaurant industry and the movie theaters, just as an example.

- Yeah, I agree with that.

I know there have been clients I have who have talked about investing in leisure activity kind of when you think in northern Michigan, right, those kinds of things.

And a lot of the advice that's going around right now is the take a pause and hold because I think there's gonna be money flowing to those areas, whether it's through incentives to build, to retain, to grow, whatever they may be, then I think nationally, that will happen.

I have a friend who runs one of the convention tourism bureaus right outside of Chicago, they are advocating very strongly for federal funding to help kind of reassure them up because it's been devastating.

And it's very interesting because Steve, I remember last week, you had mentioned the Buckeye Trail, I think House Rep Hoops had mentioned it and you guys talked a little bit about it.

And when you look at the Buckeye Trail or Toledo Metroparks or basically any park, those places are thriving right now, right?

- Sure.

- Because of the hit the other side's taking.

Because if you're trying to move people in and out, it's a lot harder than if you're an outdoors kind of thing.

RV sales went up, all those kinds of things went up.

So it is really that kind of balance of, okay, what do we need to look at next?

And I think that kind of factors into the whole, those are usually lower wage earners as well so that drag on the economy is probably gonna be sustained a lot longer than if you're working in manufacturing.

- Yeah, okay.

Well, when we come back, let's talk about some of those additional areas, what 2021 is going to look like in a little more detail.

Back in just a moment with Matt Gilroy and Denise Dahl here on The Journal on WBGU-PBS.

You're with us here on The Journal and our guests are Denise Dahl of Epiphany Planning & Development LLC, and Matt Gilroy, president of the Northwest Ohio Economic Development Association, also the executive director of the Fulton County Economic Development Corporation.

We've touched on it in a couple of different ways, but employment workforce, workforce development, that sort of thing, how do we see that unrolling as we come out of this or continue our way out of this in 2021, and maybe even beyond that when it comes to workforce in Fulton County and the area right around that?

- Yeah, I think it's gonna be really, really interesting, and Matt can talk about the specifics to his county and his region, but I think it's gonna be twofold at least.

One, we already have workforce challenges, just basic numbers to fill basic jobs, right?

So that's we've got going in.

And two, I think there's gonna be, when the job market stabilizes and everyone feels kind of safe and cozy again in their jobs, I think you're gonna see, especially with Gen X, you're gonna see a lot of job jumping because this was a time where your leadership really shined or didn't shine.

And a lot of people I think have really taken note of that and millennials were already pretty comfortable job dumping anyway, right?

- Right.

- So millennials are done, they don't have a problem sticking with the job long term, right?

- Yeah.

- So I think you're gonna see a lot of fallout from that.

So in the past, in some of the rural areas or even here in Toledo, you would see things like people would job jump for five or 10 cents, right?

I think there was a Yale study that said people take jobs based on pay and balance.

And this whole pandemic has really shone the light on what does balance really look like.

So I think that will be part of it, but I think the solid core especially in Northwest Ohio is gonna be, we have jobs, we don't have enough people.

- Okay, yeah.

And Matt, that's a challenge I think for anybody in economic development.

That's right, isn't it?

- That's right, yeah.

What we saw in 2008 and 2009 and the years thereafter, the unemployment rate in Northwest Ohio was above 10%, and some places above 15%.

And over a three year period, we saw a decline in unemployment but the levels were still at seven, eight, 9% in most counties.

What we saw last year was we went, specifically in Fulton County, from 4% in January of 2020 to about 13% in April and then back down to 4% in December.

So, we saw a very, very quick recovery in our unemployment rate.

So basically, employers by the end of the year were doing the same thing that they were doing prior to the pandemic, and that is sharing that their biggest challenge is in the labor availability.

- Yeah.

- Now, interesting enough, I think if we look at a three year window, there's a couple of things, some that are negative, some that are positive.

So for instance, one of the reasons that our labor availability is so tight is there are people that are sitting on the sidelines right now that were in the labor pool in January of 2020.

So those folks are not collecting unemployment, but they're also not employed.

Now, some of those factors may have to be retirement and those types of things as our population ages, and that means those folks are not gonna be coming back into the labor market.

However, some people may have decided to sit on the sidelines because of situations with childcare, their school district is doing remote learning or something like that.

Those folks may gravitate back into the labor pool once we get back to whatever sense of normal we end up with.

- Right.

Yeah, and-- - We're gonna see what that's gonna be like, it's hard to project.

- Yeah.

- Yeah, because-- - And do you think it's kind of interesting that as we have boomers aging out, right, and retiring, you have Gen Z who were in the classrooms I was teaching last spring and they're making the decision more and more to go to grad school, and they're also the greatest disenfranchised during this whole pandemic, like they are the ones who are saying, if they are in the workforce, why isn't my employer doing more for me, and why aren't they providing different resources or more resources?

So I think that over the next few years, we're gonna see the power of that generation to shape what human resources looks like, to shape what recruiting looks like, and there's gonna be some tough conversations on what are employees responsible for and what are employers responsible for?

- Well, and you mentioned I think the balance part a little bit and that is part of that generation's approach to work.

- Yes.

- Is that other part besides the work part, yes, how does this work with the rest of my life?

How does it fit in in a way that other generations haven't focused on the same way, I guess.

- Exactly, exactly.

- Yeah, yeah.

- And just by sheer number, there are just as many Gen Zs as there are baby boomers.

So, by virtue of the numbers, they're gonna have it on us Gen Xers as they come through the workplace.

And there's tremendous opportunity for millennials and Gen Z members.

And what I mean by that is, as baby boomers retire, there are not enough Gen Xers to fill the void that is left over the next decade.

So, there's going to be tremendous opportunity for growth in the workplace for those Gen Z and millennial folks.

- Okay, well, we're gonna have to leave it there but obviously, as Denise said, that means a challenge for employers to be able to adjust the way they do business to deal with that generation, to work with them in a way that everybody's gonna benefit.

So that's interesting.

Matt Gilroy, thank you so much, Denise Dahl, thank you so much for talking about the economy and some surprisingly good things about how we've recovered.

I think a lot of people have been concerned about, oh, things aren't gonna get well for a long time, and obviously, there have been some positives out.

So again, thank you so much for taking the time and we'll touch base with you guys again sometime as we move through 2021 and see how things are evolving out in Fulton County and the region here in Northwest Ohio.

So thank you so much.

- Thanks for having us, Steve.

- Okay, and thank you to Denise Dahl of Epiphany Planning & Development, and Matt Gilroy of the Northwest Ohio Regional Development Association, and also the Fulton County Economic Development Corporation.

You can check us out at wbgu.org and of course each week on WBGU-PBS.

We'll see you next time on The Journal.

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