Pandemic Flu and the Potential for U.S. Economic Recession

A State-by-State Analysis

A pandemic influenza outbreak is inevitable, according to scientific experts. TFAH estimates the economic impact of a potential outbreak on the country and analyzes how it would impact each state.

Trust for America’s Health (TFAH)’s March 2007 report “Pandemic Flu and Potential for U.S. Economic Recession” finds a severe pandemic flu outbreak could result in the second worst recession in the U.S. since World War II. The U.S. Gross Domestic Product (GDP) could drop over 5.5 percent, leading to an estimated $683 billion loss.

States with high levels of tourism and entertainment could be the hardest hit. Nevada’s economy could face the biggest percent decline with a GDP loss of 8.08 percent, followed by Hawaii, which could experience a 6.60 percent loss. Six states could suffer losses over 6 percent (Nevada, Hawaii, Alaska, Wyoming, Nebraska, and Louisiana). The economies in an additional 21 states could drop more than 5.5 percent and every state could lose more than 5 percent in GDP.

TFAH created a model to assess the potential losses each state could face during a severe pandemic. Based on estimates from financial and economic experts, TFAH examined the impact of a pandemic on 20 different industries, trade, and worker productivity. The model also incorporates predictions from experts of how consumer demand for products and services could drop in a number of industries. For instance, according to estimates, tourism, entertainment, and food services could experience an 80 percent decline, while agriculture, construction, retail trade, and finance and insurance could face a 10 percent loss in demand.

TFAH’s report recommends a series of measures businesses and community groups can take to help prepare for a possible pandemic. Some key recommendations include:

  • 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 their workforce.
  • Community groups should have emergency contact numbers to reach out to their volunteers and develop realistic plans for continued operations during a pandemic.