Kansas City Overview
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GLOBAL, U.S., KANSAS CITY OVERVIEW As we look back to the beginning of 2020, the global and United States’ (U.S.) economies were very strong, and the economic outlook was unparalleled. Little did anyone know that lurking just beyond the horizon were multiple events that would immediately change the momentum and direction of both the global and U.S. economies. Now, as we look forward to 2021, it is important to review 2020 to understand the multitude of events that changed the trajectory of one of the strongest global economies ever. CORONAVIRUS THE BEGINNINGS In the final weeks of 2019, reports of a mysteriously infectious severe pneumonia in China’s central Hubei province were spreading on social media platforms among doctors and medical experts. On December 31, 2019, Chinese government officials were compelled to acknowledge an unknown novel virus was overwhelming hospitals in the city of Wuhan. After a largely criticized, and delayed, investigation period, the World Health Organization (WHO) confirmed in January 2020 that a new form of coronavirus was behind the quickly spreading disease. At the time, experts considered the impact to be similar in significance to the since-contained SARS and MERS coronavirus outbreaks of the mid-2000s. As the year dragged on and cases of what would come to be known as COVID-19 grew at exponential rates, the social, economic, and geopolitical ramifications of the new disease would begin to take effect in even the furthest reaches of the world. THE DISEASE The coronavirus disease (COVID-19) is caused by the virus severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The origination of the COVID-19 disease is still under investigation by many agencies, including the WHO. Some scientists currently believe that the disease originated near where the first infections were documented in the Wuhan, China wet market. In wet markets, it’s common for many species of animals to be grouped together for sale or consumption. Experts hypothesize this situation could have led to a coronavirus ‘jumping’ from one species, through an intermediate host, to the first humans. Other medical professionals have pointed to the disease originating in bats located in the region. Definitive answers to its origination will likely take years to decades to determine. Global, u.s., kansas city To date, the disease has a documented infection total of over 70 million With the onset of stay at home orders due to COVID-19 many locations that normally would see massive amounts of foot traffic and tourists turned to ghost towns. Most notably was Times Square in New York as the photo (top) from March 29, 2020 shows. Additionally, healthcare workers and National Guard members were put to additional work within their communities, with citizens Overview showing their support and gratitude in any way possible. 14 | 2021 Market Report Global, U.S., Kansas City Overview | 15 GLOBAL, U.S., KANSAS CITY OVERVIEW GLOBAL, U.S., KANSAS CITY OVERVIEW individuals, with 15.5 million in the U.S. alone. more damaging had it not been for targeted government- Unfortunately, as infections continue to surge, the illness funded relief in the early stages of the downturn. has claimed the lives of 1.6 million worldwide and over Different government structures led to differing levels 300,000 in the U.S. Individuals from all walks of life are of lockdown measures. Western countries saw the bearing the personal loss of friends, family, and loved largest hit to economic progress as they were unable ones while healthcare systems to implement as strict around the world have been THE EIU LABELED THE COVID-19 of lockdowns, in turn completely restructured to hindering their ability to handle surges of patients. PANDEMIC A TOTAL “GAMECHANGER.” THEY NOTED THAT THE GLOBAL GDP quickly curb the disease’s SLOWING THE SPREAD effects. In countries such WILL LIKELY NOT RECOVER TO PRE- as Canada, France, and As hospitals around the CORONAVIRUS LEVELS UNTIL 2022, Germany, four years of world sounded the alarm for WITH 2021 AND 2020 LIKELY LOST economic growth was the patient surge that could lost. Though the recovery occur in high-infection zones, GROWTH YEARS. is expected to be strong in governments made tough these regions, high levels decisions to curb the spread of the disease. Initially, of unemployment threatens future growth. In some knowledge of the disease and testing capabilities Asian regions, masks and social distancing were already were lacking, allowing the disease to unknowingly an accepted cultural norm. The adoption of COVID-19 spread beneath the cover of other illnesses with similar prevention measures were implemented immediately symptoms. These circumstances were a recipe for disaster and the disease was suppressed to manageable levels. in cities such as New York City, U.S., and Bergamo, Italy, As a result, the region saw less of an economic blow from among others. Local governments saw firsthand the the health crisis. China, the EIU projects, will be the only strain the new illness could have on medical facilities. As world power to not enter an economic recession for the a result, many enacted strict lockdown measures to curb year 2020. The country still faces headwinds, as one fifth the spread of the disease. The goal around the lockdowns of its economy relies on exports, largely to countries in was to limit the ability of the virus to spread from person Just over three million initial doses of the coronavirus vaccines from both Pfizer and Moderna were administered in the 19 days following the first Europe and the U.S. shipments and leading up to the end of 2020. Approximately 14 million doses had been distributed in the U.S. short of Operation Warp Speed’s goal to person and give more time for additional research of 20 million doses by the end of the year. which lead to the development of treatments and rapid A report from the EIU labels the COVID-19 pandemic testing. It also afforded hospitals with the time to increase a total “gamechanger”, and notes that global GDP will their supplies and setup new processes for patient care. likely not recover to pre-coronavirus levels until 2022. environment with lower fiscal revenue and higher In mid-November, rising COVID-19 cases in the Kansas In terms of GDP and growth, the EIU predicts that 2020 healthcare and social expenses. City Metro pushed local hospitals to capacity. Out of ECONOMIC EFFECTS and 2021 will be largely lost years. On both a macro- fears that over-capacity issues would lead to unnecessary and micro- scale, the economic fallout of the pandemic To mitigate the economic effects of COVID-19, The COVID-19 pandemic truly was a shock like no other deaths, Mayor Quinton Lucas and the Kansas City Health will disproportionately affect smaller and more multilateral financial institutions such as the International to global economies. Lockdowns and other measures in Department instituted a “Safer at Home” order. These vulnerable industries, businesses, and entrepreneurs Monetary Fund (IMF) and the World Bank, together with the early stages caused advanced economies to grind to a guidelines were designed to mitigate the spread of while developing and emerging economies are likely the world’s wealthiest countries, have offered financial crawl previously unseen in the history of modern society. the disease, place restrictions on restaurant/bar hours to be set back years in terms of progress. Extreme support to ease the burden for low-income and emerging The strongest supply chains suffered from manufacturing and add social distancing restrictions to gatherings global poverty is expected to rise for the first time in market economies. These efforts will give the world’s disruptions, an infection-reduced workforce, facility and events. Per Dr. Archer, the Director of the Kansas more than two decades. poorer countries some short-term breathing space to closures, and forced lockdowns. Demand for products strengthen healthcare spending and implement short- City Health Department, “not only are we seeing record and services such as air travel, hospitality, and restaurant/ To combat the economic slowdown, politicians and term economic stimulus and relief. In the future, attention increases in new cases and COVID deaths, we will also bars decreased to nearly zero. leaders provided emergency aid to individuals and will likely turn to more widespread debt restructuring experience additional deaths that could have been saved businesses causing government deficits to skyrocket, if there was room in the hospital to treat other conditions.” In the U.S., economic stagnation and lockdowns forced and relief for these areas as the crisis unfolds in both the reaching levels that have not been seen since the years Mayor Lucas, Dr. Archer, and other local experts strongly the unemployment rate to skyrocket from 3.4% to 15% developing and emerging world. following World War II. The EIU asserts that developed encouraged local businesses to allow their employees to in just a few weeks. While unemployment has steadily governments have decided an increase in public debt At the individual level, tenants unable to afford rent work from home to promote distancing where possible. recovered, employment levels remain well below pre- is preferable to the total widespread destruction of have continually sought relief from landlords. In turn, COVID-19 numbers. Ultimately, uncertainty about the Through the economic collapse, ecommerce has productive capacity through the pandemic. As a result, property owners have been forced to work with lenders future, virus fears, government restrictions, and health- surged. Customers, unable to follow normal shopping some developed countries will, in the mid-term, find to creatively structure debt payments to accommodate system stresses led to a decrease in consumer confidence habits and in-person transactions, turned to online themselves in the middle of a fundamental debt crisis, the crisis.