General Business

Pandemic’s Impact on Economy Will Continue to be Felt into 2023

At yesterday’s NJBIA Public Policy Forum in Iselin, Bruce Van Saun, chairman and CEO of Citizens Financial Group, sat down with Brenda Ross-Dulan, founder and managing principal of The Ross-Dulan Group consulting firm, for a fireside chat to discuss the economic challenges that lie ahead for the country and state in the new year.

Not surprisingly, many of the challenges that businesses still face come as residual effects of the COVID-19 pandemic and the subsequent impact it had on all phases of the economy. 

“The key is to learn from [these unprecedented events such as the pandemic] and prove your resiliency, and put some of the lessons you learned to work,” Van Saun said. “During this past recession [during the pandemic] there was a massive shift in how individuals wanted to do business. They had to force themselves to use digital tools to get things done.” 

Van Saun, who joined Citizens Financial Group in 2013 after having served as Group Finance Director at the Royal Bank of Scotland (RBS) and as an executive director on the RBS board, said that there are still a lot of things that came out of the pandemic that businesses are still working on, including satisfying customers’ reinforced preference for convenience, the need to learn about said customers through data via digital interactions, as well as contending with the continued shift to remote work.

“With jobs becoming more digital, there is also a need for new skills. Businesses will need more digital engineers and coders, for example, [even in industries that may not have needed these positions before]. This is going to take a sustained effort to upskill people and position the economy on the new footing and direction that it is heading,” Van Saun said.

Additionally, inflation will continue to be a concern while the cloud of a recession looms large.   

“It is clear in hindsight that everybody in Washington, D.C., was doing their best to contend with an unprecedented situation, but there was too much [spending]. Now, folks in Washington are starting to take the punch bowl away and saying, ‘OK we have clearly fueled inflation, we have to rein that back in.’” 

Van Saun said that the Federal Reserve Board aggressively raising interest rates is starting to have an impact on slowing down consumer spending as well as various industries, such as real estate, for example. 

“We are already feeling the effects of that, but it is going to be a tough year with either slow growth or shallow to moderate recession, so we need to prepare for that,” he said. 

For businesses, Van Saun said there needs to be a continued focus on workforce development and upskilling so employees can “face the future with confidence.” 

Speaking directly to the legislators in the room, he said, “It is important that we try to keep the burdens on companies modest as we go through this period. This includes not raising taxes, and sunsetting taxes that were put in as surcharges, for example. When folks go through the storm, they need to have some maneuverability in order to get through it and come out on the other side.”

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