The coronavirus will cause U.S. economic contraction in the second quarter, leading to a greater chance for recession, according to more than 60 economists polled by The Wall Street Journal. The poll also found that economists also expect additional interest-rate cuts by the Federal Reserve in the weeks ahead, amid the financial uncertainty surrounding the coronavirus pandemic.
Business and academic economists in the survey now expect gross domestic product to contract, on average, 0.1% at an annual rate in the second quarter — a significant downgrade from February, when they still expected GDP growth of 1.9% from April to June.
The monthly survey of economists also found that 75% of economists expect the spread of the coronavirus to be a “significant drag” on full-year economic growth in 2020, shaving more than 0.5 percentage point from growth as measured from the fourth quarter of the prior year.
Within the seniors housing industry, how facilities fare from a financial perspective amidst the coronavirus spread may serve as a strong litmus test for providers, said speakers at Bisnow’s Senior Housing Boom event in Dallas Wednesday. Most facilities already struggle with the formidable economic effects flu season brings each year, they said.
“It creates a massive disruption in occupancy of senior housing every year,” said KeyBank Senior Production Analyst William Allison. Whether facilities are prepared to deal with communicable diseases can make or break them in a pandemic situation. “It’s a great opportunity for the best-in-class care providers to differentiate themselves from those who don’t have good hygienic processes in place.”
Speakers also discussed how the national panic around COVID-19 has created an unexpected silver lining for seniors housing investors, with interest rates hovering near the bottom.
“From an investors’ perspective, they are looking at the market, at the Treasury rates … and it is an advantage for the investors to use the lower interest rates at the moment,” Colliers International Vice President Elena Bakina said.