On March 20 I posted about how difficult the coming weeks were going to be. As expected, the past week brought much worse news than the previous week.
News about the spread of COVID-19 has followed the same pattern as the news that has come from the rest of the world. As states have responded to the outbreak with shelter-in-place orders, the economy has slowed. The huge jump in first-time unemployment claims filed – some 3.28 million new claims – shocked the public but was also not a surprise to economists tracking the pandemic.
The next few week’s news will be bad too. That’s how the fear stage of a crisis works out. It is likely that the news won’t improve much for a while. That doesn’t mean we won’t work through the fear stage. We’ll accept the gravity of the situation, or get used to the bad news, and then work our way through the crisis. Business owners I know started doing that very thing this week and it was a tough week for that reason. Working through this means layoffs and pay cuts. Small business owners hate taking those steps but they are the first steps in recovering. You have to survive to recover. And there will also be good news too. Last week Congress passed a package of measures that will help with some of the economic damage from the outbreak. Federal guidance on isolation were extended and showed the government was taking the outbreak seriously as a public health threat. Even the stock market showed signs that the selloff may have stopped.
One thing that helps with the fear stage is being informed. That has its own set of challenges. You have to work hard at deciphering information from opinion but here’s a tip: avoid any article that has the words “could,” “might,” or “may” in the title. These are attempts at predicting how this crisis will play out. They are most certainly going to be wrong. The forecasts will be both too gloomy and too optimistic, but almost certainly wrong. It’s not that the articles won’t be well-researched or the forecasts unfounded; it’s that the most important variables are so far from being understood that you can’t reliably predict an outcome.
As an example, some very smart people earlier this week predicted that unemployment “could” reach 30 percent as a result of the shutdown. That was the Federal Reserve Bank of St. Louis. That’s 47 million people, or six times the number of people thrown out of work in 2008-2009. Several industry categories would have to go to zero employment for that to come true. More importantly, that kind of forecast leaned on variables about infectious rates and quarantining that aren’t even known in countries that faced the virus a month before the U.S.
Why does this matter? In the fear stage, our minds gravitate towards the negative emotions. We envision the worst that could happen as our likeliest future. Christy Uffelman from Align Leadership shared this Harvard Business Review article on the emotions of fear last week. It’s OK for leaders to embrace the grief that this kind of crisis brings; it’s not OK for leaders to embrace opinions and feelings as facts. Better we should stick with what we know, rather than search for what experts think might happen. Reflecting again on the financial crisis, many of the experts who were forecasting the end of the world in September 2008 were telling us that the panic was overblown in July 2008.
The course of events over the next few months is unclear. Uncertainty helps feed fear too. But some things that are uncertain will have positive outcomes too. There will be resources thrown at developing a vaccine as quickly as possible. It won’t take as long as we fear. Prior to World War II, it took three years to build an Essex class air craft carrier. By 1943, shipbuilders were launching one every 3 ½ months.
We simply don’t know what we don’t know about this pandemic. Stick with resources that inform you, rather than those trying to tell you what will happen or how to feel. Here are a couple of suggestions:
Allegheny County established a rumor control website for public health concerns.
Newmark Knight Frank issued a clear-eyed and objective report on how the pandemic is impacting commercial real estate and construction.
U.S. Senate Committee on Small Business and Entrepreneurship posted a useful guide to the benefits in the $2 trillion CARES Act for businesses.
There is construction news, even in a shutdown. First, the shutdown of construction may be short-lived. Speaker of the PA House, Mike Turzai, is introducing HB2400 next week to allow all construction projects to move forward with mitigation efforts in place. Industry associations have been working to draft mitigation plans this week to make job sites safe for workers. It is not known if Gov. Wolf will support such a bill. The General Contractors Association of PA – working closely with the MBA – developed a COVDID-19 exposure mitigation plan that will inform PA policy.
In project news, Mascaro Construction is coming out of the ground on the $12 million Steelers Pro Shop addition to Heinz Field. Carl Walker Construction has started work on the $11 million renovation of the UPMC parking garage at 3500 Terrace Street. Omega Building Co. is underway on the $7.9 million kitchen and restroom renovations at the Cork Factory. M*Modal is taking 53,000 square feet in the $20 million expansion/renovation of 7514 Penn Avenue that Franjo Construction is doing. Lone Pine Construction was awarded the Westmoreland County Municipal Authority’s $5.5 million office and garage in New Stanton.