Kentucky’s Post-COVID Recovery
Two years after the COVID-19 pandemic began, Kentucky is showing strong signs of improvement, stability, and growth. Like many parts of the US, Kentucky saw an unprecedented economic downturn beginning in 2020 and lingering through much of 2021. Shutdowns, quarantines, and uncertainty led to record unemployment numbers, sharp declines in business revenues, business closures, and consumer pessimism. In 2020, unemployment numbers peaked at over 16% and workforce participation fell to nearly 50%. Overall, nearly 300,000 jobs were lost during the initial months of the pandemic. Kentucky’s GDP value, a metric showing the value of goods and services the state produces, dropped by more than 34%. Virtually every industry felt the negative impact, and the pain was especially sharp across the small business sector. Some businesses closed and never reopened. Two years later, however, the pain has subsided for most, and recovery and opportunity are prevalent.
By the end of Q3 2021, more than 82% of jobs lost during the early stages of the pandemic had been recovered, bringing nonfarm employment numbers nearly even with pre-pandemic levels. While some industries have taken longer than others to recover, local improvements in construction, manufacturing, and financial services, to name a few, have outpaced national trends. Even wages are on the rise across most industries, inflation notwithstanding. The state’s GDP has risen nearly 80% since its lowest point in 2020. To be sure, raw data suggests positive economic growth across the Commonwealth.
While positive metrics don’t simply mean a return to normal for everybody, they do indicate innovation and even silver linings for business leaders who were compelled to adapt. Remote work opportunities have benefited employers and employees alike, bringing many businesses back to life and filling jobs in new ways. This provides efficiencies, flexibility, and sustainability for businesses, employees, and customers who all maintain unique needs.
In the Appalachian region, where the economy is always more vulnerable, recoveries are being aided in large part by the EDA’s Coal Communities Commitment, which earmarked $300 million to develop new job opportunities. One of the most promising endeavors in Appalachia is the local ag-tech company, AppHarvest. Founded in 2017 and in full production in 2019, AppHarvest has brought cutting-edge technology to rural Kentucky in the form of massive indoor farms. Although it also took an economic hit throughout the pandemic, it began trading publicly in early 2021 and has plans to complement its flagship Morehead establishment with the 2022 additions of farms in Berea, Richmond, and Somerset, and a second Morehead location. This growth will bring hundreds of jobs to the region, not to mention new avenues of sustainability and communal access to fresh produce.
Communities and industries across Kentucky are recovering well from a once paralyzing pandemic. The pain is subsiding. There is feeling again; there is mobility; there is restoration. Economies are strengthening. And as AppHarvest brings hope to a traditionally disadvantaged region, it, along with many other strong indicators, are a symbol of hope for a long-suffering Commonwealth.