Even as states reopen, COVID-19 pandemic continues to devastate economy

Even as southeastern Pennsylvania enters the green phase Friday, the pandemic continues to devastate the economy.

Companies are continuing to downsize or go out of business and economic experts say we will see more of that in the days and weeks ahead.

On Thursday, GNC announced that it was closing 1,200 stores after losing $200 million. Macy's is laying off 3,900 corporate employees and managers. Chuck E. Cheese's parent company filed for bankruptcy protection as a result of the pandemic.

But David Fiorenza, an assistant professor at Villanova's School of Business, says to expect more to come.

"A whole host of other businesses that I think will be filing bankruptcy in the near future," said Fiorenza.

Derek Miller, a senior research analyst at the Lending Tree, says the uncertainty of what lies ahead with the virus is a big reason for that.

"If consumers don't feel comfortable going to bars and restaurants and all the other things they spend money on, it's hard for those businesses then to continue employing people," said Miller.

Already research by Lending Tree shows that when they compared the month of April with April of 2019, Pennsylvania lost one million jobs for an annual revenue loss of $53.6 billion.

"Pennsylvania ranks 9th with 17% of its jobs. Michigan had the top, losing 23% of its jobs," said Miller.

Professor Fiorenza says the loss of all this revenue to the budgets of municipalities will bring more bad news ahead.

"I believe you're gonna see lots of tax increases and or people being furloughed in state and local county governments," Fiorenza said.

Then there's the downsizing and cancellation of events that will also have an impact. The Philadelphia Art Museum announced that it is cutting 20% of its staff and the Pennsylvania Ballet announced it was cancelling this year's production of "The Nutcracker."

What will it take and how long will it take to turn things around due to the pandemic?

"If these cases don't go down and people still stay scared, there's a really big shift in the economy so that a long 12-18 month type of thing," said Miller.

And with the virus flaring up again in some Sun Belt states, there is a lot of debate on whether new lockdowns are the answer.

Analysts say what is clear is that states must get a handle on the virus until a vaccine comes along.
Copyright © 2021 WPVI-TV. All Rights Reserved.