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Shirley Leung

Will the coronavirus cause a recession? Here’s what local business leaders say

Some worry hysteria alone could seriously damage their companies

The Tuesday lunch time rush at the Chicken & Rice Guys restaurant at Downtown Crossing in Boston.David L. Ryan/Globe Staff

For Ian So, chief executive of the Chicken & Rice Guys, his worst-case scenario is a widespread Covid-19 quarantine that keeps people from eating out.

“I don’t think that is going to happen,” he said.

But here’s the thing: He still needs to plan for the worst. For So, that means hoarding cash. He considered reopening a Medford restaurant that was flooded in December, but now he’s taking money he would have reinvested in that location and saving it so he can the pay the bills, such as meeting payroll, if revenue were to drop off sharply because customers are homebound.


“I would have never thought something happening half across the world would affect our business. It’s pretty mind-blowing,” said So, who operates two Boston restaurants and six food trucks.

At the same time, So expressed a concern I kept hearing from other business owners who are watching the virus news gyrate stock markets and spook consumers.

“I’m more scared about the hysteria around the coronavirus than the actual virus,” So said.

In August, when the stock market was in a breathtaking downward spiral and people worried about a recession, I took the temperature of nearly a dozen CEOs to see if they were bracing for bad times. The answer surprised me: No.

Recently, I went back to some of those same CEOs — and added some new ones to the mix. This time, they told me the economic outlook is less rosy than it was at the beginning of the year, but no one is preparing for doom and gloom. But the uncertainty is unsettling; in some cases, I had to re-interview executives because business conditions with the rising number of Covid-19 cases in the United States had changed so dramatically by the time this piece was published.


The upshot is that the viral outbreak will hurt the global economy. Could it slow the US economy? Yes, but not for long. Will the United States fall into a recession? Read on.

Like So, John Fish, CEO of Suffolk, the construction company, is preparing for the worst and doing contingency planning in case a construction site needs to be shut down or employees have to be quarantined. When I talked to him last week, he didn’t think the United States would fall into a recession; this week, he believes there could be one but it would be “insignificant.”

Still, he added, “Nobody should jam their foot on the brakes."

Here’s what other Boston-area business leaders are saying about the economy, sector by sector:

Financial services

Karen Firestone has some advice to anxious investors worried about their 401(k) balances: “Don’t panic.”

She’s taking her own advice. Firestone’s Boston investment firm, Aureus Asset Management, has been selling some stock to lock in profits while increasing holdings of others that have fallen sharply. The firm recently increased its positions in Amazon, Facebook, and Salesforce and is looking for deals. For example, it’s weighing whether to buy stock in Align Technology, the maker of Invisalign clear braces, a stock that has been suffering because the company not only manufactures in China but has been expanding into the Chinese consumer market.

“It’s still too early to know the extent of economic damage from the virus, but sometimes investors need to take these buying opportunities when we get them,” Firestone said.


Still, she doesn’t advise people to try this at home. Firestone has a team of analysts evaluating at what price stocks become attractive.

“I don’t think the average investor should do anything, as this picture keeps changing so rapidly,” she said.

The massive sell-off on financial markets doesn’t surprise Firestone. She says many stocks were overpriced, and a correction made sense. With the Dow Jones industrial average near a bear market — a decrease of 20 percent over a sustained period — Firestone thinks the market is “closer to a bottom than the top, where we were three weeks ago.”

Venture capital

When I reached out to Boston venture capitalist Maria Cirino two weeks ago, she was at the RSA cybersecurity conference in San Francisco, where registration was down and key sponsors had pulled out amid Covid-19 concerns. Now it’s hard to imagine anyone attending a major conference in the near future, with a steady stream of cancellations as companies pull back on travel.

For more than a year now, Cirino, managing director of .406 Ventures, has been telling portfolio companies to prepare for a downturn. That means don’t go on a hiring or a spending spree.

Today, she’s more confident the United States will experience a downturn than when I spoke with her in August. The recent announcement by the British bank HSBC that it would cut 35,000 jobs over three years struck Cirino as something of a warning.


“I haven’t seen something like that since 2008,” she said, referring to the throes of the Great Recession.

As for whether the United States might fall into a recession this year, Cirino told me: “If I were a betting person, I would say yes.”


When you’re in the car business, you’re prone to being optimistic. Count auto magnate Ernie Boch Jr. in that category.

“I always believe in never make lasting decisions from the market when it’s super high and when it’s super low,” Boch said. “You have to be pragmatic.”

But he is keeping an eye on the number of customers in showrooms and on whether banks are tightening up on auto loans.

His biggest concern is that the coronavirus disrupts the auto supply chain and affects inventory.

“If you are building a car and you need a hundred parts and you only have 98, you can’t build a car,” Boch said.


Sushil Tuli, who runs Leader Bank, is battling the coronavirus on two fronts: the workplace and the bottom line.

Tuli has been strategizing on how to handle a quarantine. He’s making sure all 250 employees have a laptop in case anyone needs to work from home for a prolonged period. And he is rolling out cross-training in case an entire department gets hit with an outbreak. For example, employees in the wire transfers unit are learning how to handle deposits, and staffers in deposits are learning how to conduct wire transfers.


Fears of an economic slowdown triggered by Covid-19 have pushed down the 10-year Treasury note, sending 30-year mortgage rates to a record low last week and again on Monday. Leader Bank is a major residential lender, so over the last month it has dealt with a lot of customers scrambling to refinance. Tuli has hired temporary staff and is having employees work overtime to meet what he calls a “refinancing boom.”

“It’s unbelievable,” he said.

Like other executives, Tuli is not planning for a recession, but he fears that some sectors, such as the hospitality industry, will be hit hard if travel is restricted, leading to layoffs. “I am concerned about people being able to make their mortgage payments if they aren’t working," he said.

He also thinks the commercial real estate market could soften. He said wealthy people from China and other countries like to buy investment properties in Massachusetts. A major viral outbreak could slow those transactions, and that could ultimately drive down sales and commercial real estate prices overall, he said.


Handbags, that’s what’s on the mind of Karen Hayes, a co-owner of Pretty Poppy, a women’s jewelry and accessories business with stores in Newburyport and Portsmouth, N.H. Many of her goods come from China; the virus is disrupting the supply chain, and orders are taking longer than usual to be filled. Factories may have reopened in China, but not all of them.

People don’t shop as much this time of year, but starting in April customers might begin to notice if Pretty Poppy has trouble stocking up during the spring selling season.

“We’re going to know a lot in the next 30 days,” Hayes said of inventory levels.

Hayes does not think Covid-19 will unnerve consumers, because Americans “have really short attention spans.” She believes the fundamentals of the economy are good, especially the low unemployment rate in Massachusetts. Her take: As long as people are working, they will be shopping.

Hayes believes what keeps the economy humming may be as simple as this: “Wash your hands, people.”

Shirley Leung is a Business columnist. She can be reached at