Study calculates pandemic’s effect on N.H. economy

If a flu pandemic were to hit New Hampshire, a recession could follow in its wake, but the impact would be less severe than in many other states, says a new study on the economic effects of a global outbreak of disease.

Researchers at the Trust for America’s Health released the report “Pandemic Flu and the Potential for U.S. Economic Recession” on March 23 using the 1918 flu pandemic as a model to project what a similar crisis would do to the country’s economy today.

The trust’s study estimates that the national gross domestic product could drop by more than 5.5 percent, or $683 billion — the second-worst recession since World War II.

According to the report’s state-by-state analysis, New Hampshire’s economy could shrink by 5.30 percent, with losses totaling $2.9 billion. The estimates place the Granite State at 44th for economic impact.

New Hampshire was also further down the list for gross state product losses in the six-state New England area, just behind Rhode Island (45th, 5.29 percent GDP loss) and Massachusetts at 47th place, or 5.20 percent. Massachusetts also tied with New York for 47th place.

New Hampshire may do relatively well economically during a pandemic because of its size and its reliance on critical sectors is less than other states, said Laura Segal of the Trust for America’s Health.

“While New Hampshire may still experience a recession, it has lower levels of tourism, manufacturing and transportation than others,” said Segal. “New Hampshire also has higher participation in real estate and professional service sectors, which the researchers feel will recoup losses later in the year after a pandemic.”

She also said being a “small state,” with a smaller population and large rural areas, was a bit of an advantage in that New Hampshire’s economy was in a “more stable environment” than other more populous states.

Of the other New England states, Maine was ranked 40th, a 5.38 percent loss, and Vermont was ranked 19th, or 5.65 percent loss.

Nationally, Washington, D.C., Maryland and Virginia, with their strong government sectors, would be expected to suffer the softest impact — about a 5 percent drop in GSP or less.

Nevada fared worst, with a loss projected at over 8 percent of GSP, or $9 billion, with Hawaii second with a 6.6 percent GSP loss, or $3.6 billion, since both states’ economies are heavily tied to tourism.

New Hampshire’s tourism industry would be its hardest-hit sector, according to the report. Losses in the Granite State were estimated at $328 million in the accommodations and food service sector.

Manufacturing and transportation and warehousing also could suffer steep declines of $165 million and $148 million, respectively, according to the report.

The state’s health-care sector, however, could make gains — as much as $171 million — as hospitals and other health care-related resources surge in response to a pandemic.

A pandemic could have profound impacts on trade, asserts the report. The study estimates that fluctuations in trade could drop the U.S. GDP about 1 percent, or $124 billion. In New Hampshire, the projected GSP loss from the trade impact is estimated at $500 million.

The Congressional Budget Office estimates that 90 million Americans could contract a pandemic flu strain and of those, 2.25 million could die — about a 2.5 percent fatality rate.

In New Hampshire, an estimated 389,000 could become ill, with 10,000 dying from the disease.

To put the figures in perspective, using 2005 population estimates by the state Office of Energy and Planning, virtually everyone in the towns of Manchester, Nashua, Concord, Derry, Salem, Merrimack, Keene, Portsmouth and Claremont would come down with the pandemic strain of the flu, and almost every person in a town the size of Hanover would die from the disease.

The report also makes several recommendations to prepare for a possible pandemic including:

• Encourage the private sector and government at all levels to examine and modify family and medical leave policies.
• Expand telecommuting capabilities.
• Assess infection control procedures in the workplace.
• Establish contingency systems to maintain delivery of goods and services during a pandemic event.
• Update methods for communicating with personnel.
• Community groups should have emergency contact numbers to reach out to their volunteers and develop realistic plans for continued operations during a pandemic.

To view a copy of the report, visit healthyamericans.org/reports/flurecession. — CINDY KIBBE