Some sectors will fare worse than others when it comes to the economic impact from Omicron-related worker absences, economists predict.
As Omicron sweeps through Ontario, it could take billions of dollars out of the province’s economy.
Economists say that’s the potential toll if 20 to 30 per cent of Ontario workers book off sick with the rapidly-spreading COVID-19 variant, as predicted by the province’s chief medical officer of health Dr. Kieran Moore.
“It’s certainly in the billions,” said David Macdonald, senior economist at the Canadian Centre for Policy Alternatives.
While Moore’s prediction was meant to be across all sectors, some will fare worse than others when it comes to the economic impact from Omicron-related worker absences, Macdonald argued.
“If it’s professional services, it’s going to be less of an impact. If you’re preparing an economic analysis or a legal report, and it’s a week late, it’s not going to have a big impact. If your entire manufacturing production line has to shut down for a week or two, that’s different. It really depends on what sectors the workers are in,” Macdonald said.
There will also be a toll from absent workers in sectors which aren’t traditionally seen as large drivers of the economy, said Pedro Antunes, chief economist at the Conference Board of Canada.
If large numbers of teachers call in sick and parents can’t go to work because have to stay home with their school-aged kids, there’s a cost. So too is there a cost if people can’t get to their workplaces on time if public transit is cut back.
“There are knock-on effects. I think, ultimately, we won’t know for years what the full economic impact of this pandemic will be,” said Antunes. “There’s no question there’s going to be a significant impact. The amount depends on how long this lasts.”
If Ontarians work 10 per cent fewer hours in January than usual, that would cost the provincial economy roughly $4 billion, Antunes estimated.
Monday, Metrolinx started cutting back some routes because of a staffing shortage. The TTC has also said it’s trimming some routes.
Already, the manufacturing industry has seen some production halted because of Omicron-related absences. The already-struggling retail industry has also been hit hard, said Michelle Wasylyshen, spokesperson for the Retail Council of Canada.
“RCC’s retail members are currently reporting employee absenteeism up to 20 per cent due to the Omicron variant,” Wasylyshen said in an email.
Some retailers have had to close their stores for 48 hours, both for cleaning and because of staff shortages, Wasylyshen added. Pharmacies are having an even harder time replacing absent staff, because of training and certification requirements. With cutbacks in PCR testing eligibility, staff with cold symptoms aren’t able to determine if they’ve got COVID, and are staying home as a precaution, she added.
Manufacturers across the country are already seeing anywhere from 10 to 20 per cent of their workers absent, said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.
“We’re hopeful it’s plateauing, but we’re keeping a very close eye on things,” said Darby. “You can’t work from home in manufacturing.”
For the auto parts industry, not much damage is likely to be done by Omicron. But that’s only because the industry has already taken a beating lately, thanks to the worldwide semiconductor shortage.
“There’s so much bad that’s going on in the industry right now, it’s actually protecting us from the worst,” said Flavio Volpe, president and CEO of the Automotive Parts Manufacturers Association.
With auto manufacturers shutting down some of their production lines to deal with the chip shortage, they’re not ordering as much from parts manufacturers, said Volpe. If the auto manufacturers were going full tilt, they’d probably be ordering more than some suppliers could handle. And that would have an immediate and devastating impact, Volpe said.
“If you make a door-handle, you can’t shut down an automaker’s entire production line because of a door-handle, or you’d lose the business,” said Volpe.
Article From: The Star
Author: Josh Rubin
