National and state economic experts on Thursday expressed a mixture of optimism and caution during the Dubuque Area Chamber of Commerce’s 2021 Forecast Luncheon.

The ongoing COVID-19 pandemic loomed large over the annual event, both in terms of its content and presentation. Due to concerns over the virus, the luncheon was held virtually.

Following the 90-minute presentation, Chamber President and CEO Molly Grover expressed hope that the region’s economic recovery will be robust, even if it doesn’t take place immediately.

“Based on what we heard today, (the experts) all seemed to indicate that everything economically is still so related to the pandemic,” she said. “But what I think I heard from all three was a common theme of optimism about a recovery. Once we do get past this, the expectation is for the recovery to go well.”

Lasting impacts

Chris Kuehl, managing director at Armada Corporate Intelligence and the event’s first presenter, made it clear that the past 10 months will have lingering impacts on the economy, even after COVID-19 is in the rearview mirror.

“We are going to see permanent changes in the way people work and permanent changes in the way people consume,” he said.

He suggested that businesses might shift to a new model in which employees work three days per week at the office and two days per week from home.

Kuehl also highlighted the way the pandemic decimated the restaurant and hospitality industries. But he expressed optimism that these parts of the economy could return to prominence sooner rather than later, arguing that they could ramp up quicker because jobs in those lines of work generally require less training than those in other industries.

“(A large portion of) the people who lost their jobs were in the service sector,” he said. “Those jobs will come back very quickly once the openings begin.”

Curtis Dubay, senior economist in the economic policy division at the U.S. Chamber of Commerce, cautioned that economic resurgence is inextricably tied to COVID-19. As a result, the recovery will be a bumpy one.

“The virus is really what’s controlling the economy … as the virus goes, so too does the economy,” Dubay said. “What we have seen very clearly is that when the virus levels spike, we will see a drop in economic activity.”

He said this was underscored when the economy performed strongly in October and November. However, virus levels spiked in December and the nation lost 140,000 jobs, marking the first time the U.S. economy experienced a net decrease since April.

Despite these inevitable ebbs and flows, Dubay said he is “bullish” on how the economy will perform in 2021. He noted that finance and real estate industries already are performing well.

Echoing Kuehl’s perspective, Dubay argued that struggling parts of the economy — such as restaurants, tourism and events — will return in a big way in a post-pandemic economy.

“There is pent-up demand, and there is a lot of money that has been sitting on the sidelines,” he said, referencing federal stimulus funds that many consumers have not yet spent.

Grover on Thursday emphasized that the federal government, including lawmakers representing Dubuque, has helped the local business community stay afloat.

“The federal government has helped us avoid the worst possibilities through various relief programs,” she said.

Looking local

Presenters on Thursday provided a global and national perspective on the pandemic and economic recovery, but they also strived to localize pertinent developments.

Dave Swenson, a research scientist at Iowa State University and lecturer at the University of Iowa, emphasized that Iowa is “unique in many, many ways” compared to the rest of the country.

During the Great Recession, Iowa faced a less-severe decline and then recovered at a faster pace. However, he emphasized that Iowa’s economy had been relatively stagnant in recent years.

“Right up to the pandemic, Iowa’s economy was basically just limping along,” he said. “In fact, Iowa grew more slowly than all of its neighboring states this last decade.”

Swenson emphasized that prominent economic sectors in the state — including agriculture and manufacturing — lend a sense of stability to the economy. Other industries could be poised for disastrous results.

“We may lose 20 to 30% of our dining and drinking establishments in the state of Iowa,” he said. “That is a possibility.”

Grover called the potential hit to local restaurants and bars a major concern and noted that the chamber has responded by launching Dubuque Eats, a campaign to encourage increased sales for members in the restaurant and hospitality industries.