Officials expect slow economic recovery from COVID-19


By Paul Hughes, Republican-American

HARTFORD — The state’s top economic development official estimated on Monday that the Connecticut economy will likely take until the second half of 2021 to recover from the coronavirus pandemic.

David Lehman, the commissioner of the Department of Economic and Community Development, delivered that assessment to state lawmakers on the Appropriations Committee two days before a second group of businesses are slated to open back up to the public Wednesday.

“There was a time in March where I thought that this would be a one-to-two-quarter type of event, but it is clear that is not going to be the case,” Lehman said.

He said he believes the state economy will take at least until the middle of 2021 to reach pre-outbreak employment levels, and more likely take until the end of next year.

There have been more than 600,000 applications for unemployment benefits, and the record joblessness has required the state to borrow from the federal government to pay unemployment claims.

Lehman also said he expects the economic output to fall throughout the rest of 2020 based on current trends.

Real gross domestic product increased 1.6% in 2019, according to a preliminary federal estimate from April. Real GDP represents the market value of goods and services adjusted for inflation.

“I think there is a real chance you have single-digit negative GDP growth for the full year,” Lehman said.

The initially reported 1.6% increase in real GDP in 2019 was the biggest annual increase in three years. It stayed flat in 2016, and then increased 0.4% in 2017 and 0.5% in 2018, according to the U.S. Bureau of Economic Analysis.

GOV. NED LAMONT AGREED with Lehman’s estimate that employment is likely to take 12 to 18 months to recover from the coronavirus-related losses.

He said his administration is expecting the state economy to perk up over the next six months, but the employment recovery is likely to take as long as Lehman anticipated.

“When do we get back 100%, and then 110%? I think David is probably right, it is going to take a little longer than that, but we’ve got to get that economy going a lot sooner than that,” Lamont said.

He also said his administration’s budget planning also assumes the economy will rebound by the end of the year, otherwise there will be bigger budget challenges.

The latest estimates are projecting a state deficit of more than $2 billion for the upcoming 2021 fiscal year that starts July 1 on top of a $620 million shortfall for the present fiscal year.

Lehman told the Appropriations Committee that he was unable Monday to estimate how many businesses and jobs might be expected to be permanently lost to the coronavirus pandemic.

He said the economic toll will become more evident as Connecticut gradually reopens over the next three months. He said the Lamont administration should have a better sense in September after seeing how many employees get rehired and where the unemployment rate settles out.

Before the COVID-19 outbreak, the state had not yet recovered the 119,900 jobs that had been lost during the Great Recession between March 2008 and February 2010.

THE LATEST DAILY NUMBERS showed one of the lowest increases in the number of coronavirus-associated deaths since the first fatality was announced on March 18.

The Department of Public Health reported only three additional deaths since Sunday. There have been 3,355 confirmed deaths of patients who tested positive for COVID-19 around the time of death, and 846 probable deaths of untested people whose death certificate lists COVID-19 as a cause of death or a significant condition contributing to death.

Hospitalizations declined by just two patients to 203 statewide. The hospitalization rate has been steadily declining for seven weeks.

There were an additional 147 cases of COVID-19 reported Monday. There have been 43,303 laboratory-confirmed cases and another 1,932 probable cases involving patents who have not been tested, but whose symptoms indicate they are likely to be infected.

Public health officials received 7,255 test results since Sunday.

There have been 354,445 tests done, but this figure includes multiple tests of the same patient or specimen.

THE NAUGATUCK VALLEY HEALTH DISTRICT reported Monday there have been 371 cases in Naugatuck and 48 in Beacon Falls. The health district reported there have been 35 confirmed and three probable deaths associated with COVID-19 in Naugatuck and none in Beacon Falls.

As of Friday, the Chesprocott Health District reported there have been 66 cases in Prospect and no coronavirus-related deaths.

Elio Gugliotti contributed to this report.