Study says economy will take years to bounce back

STORRS, CT (WFSB) – The University of Connecticut released a report Friday on the economic outlook for our state and it looks bleak.

Researchers with the Connecticut Center for Economic Analysis at UConn predicted that even in the best case scenario, Connecticut’s recovery from COVID-19 will be long and difficult.

Typically, the report just looks at the economic trajectory for 10 quarters; but given the pandemic, it report looks at where Connecticut may be headed over the next 10 years. To put it simply, they said it looks bad.

Much like the entire country, Connecticut is facing huge financial challenges as a result of the pandemic.

The 19-page study said it’s become clear that the national recovery has slowed dramatically from the anticipated “snap back” of late spring and summer, and Connecticut is no exception.

Researchers said forecasts from leading financial firms JP Morgan, Moody’s, and Goldman Sachs have all scaled back their growth forecasts, and as infection rates continue to surge in many states, the economy continues to be bruised.

UConn professor Fred Carstensen said Connecticut was already in trouble before COVID-19.

“We had never recovered from the great recession 12 years ago,” Carstensen said. “We were still about 17,000 jobs below where we had been in our previous peak and this had been a progressive problem in Connecticut.”

In Feb. 2020, the economy was about 6 percent smaller.

“And then with the pandemic comes along and because, in fact, over the last 10 years, we had seen a lot of our job growth in tourism and hospitality. Those were areas that were particularly hardest hit, so we lost almost 300,000 jobs in two months when the pandemic shut downs hit in March and April,” Professor Cartensen explained.

He said those areas will be slow to recover since folks are staying close to home and not traveling as much.

Thursday, Gov. Ned Lamont talked about the budget and mentioned that Connecticut saw an influx of people moving into the state after years of people moving out.

The study suggested that there were things the state could do to mitigate the damage and residual weakness from the pandemic, including strengthening the state’s IT infrastructure and making the state competitive to attract major data center investment.