Outlining the ways in which the COVID-19 pandemic continues to affect Kentucky’s economy, the Center for Business and Economic Research (CBER) — the applied economic research branch of the Gatton College of Business and Economics at the University of Kentucky — released its 50th Kentucky Annual Economic Report today.
The report is one of the many ways CBER fulfills its mandated mission as specified in the Kentucky Revised Statutes to examine various aspects of the Kentucky economy. CBER performs research projects for federal, state and local government agencies, as well as for private sector and nonprofit clients nationwide.
The report covers a variety of issues ranging from an economic forecast for the Commonwealth in 2022 to a comprehensive presentation of agricultural, community, economic, economic security, education, energy, environment, health, infrastructure, innovation, population and public finance factors affecting Kentucky’s future economic prosperity.
“Many people, from business leaders to politicians to citizens, will find relevant information in the annual report,” Michael Clark, director of CBER, said.
Kentucky’s economy has taken the pandemic’s punch and is slowly recovering. According to the report, by October 2021, the state had recovered 84% of the jobs lost during the initial months of the pandemic, and the total value of goods and services produced in Kentucky reached pre-pandemic levels last year.
“As the pandemic approaches its third year, COVID-19 continues to dominate the economic narrative. While employment and output have improved, other aspects of the economy show that we are still wrestling with pandemic’s effects,” Clark explained. “The pandemic fundamentally altered the economy. As a result, businesses, workers and consumers are still adapting to these changes.”
Additionally, many workers who left jobs during the pandemic — particularly parents of young children and those close to retirement — have not returned to the labor force. Others have returned, but not to their previous jobs. Instead, the number of individuals taking the initial steps to start their own business is up sharply compared to the last economic recession.
There are more than 100 trends, forces and factors affecting Kentucky’s economy presented in the report. Equity, a new area in this year’s report, discusses economic gaps between racial and ethnic groups across the state. “Persistent gaps in access to resources, such as education that improve productivity and earnings, impose costs on minorities and society as a whole,” Clark said.
According to the report, the pandemic has cast a long shadow over society and will continue to affect the economy for some time.
“However, Kentucky continues to face many of the same challenges that existed prior to the pandemic, including workforce development, labor force participation and racial disparities. In many ways, the pandemic has magnified these challenges,” Clark continued. “We consistently note the importance of education to address these issues and shape Kentucky’s long-term economic and social well-being. This has never been more true. Investing in education and training increases productivity, raises wages, improves health and reduces economic insecurity.”
“A strategic priority of the Gatton College is to increase external engagement and promote economic growth in Kentucky,” Dean Simon Sheather added. “It is our belief that every citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. Our goal with this report is to help inform business and community leaders as they consider how to address challenges throughout the Commonwealth — with the hope it will improve household incomes, individual health and the overall well-being of our citizens.”
Digital copies of the 2021 Kentucky Annual Economic Report can be obtained here or by emailing michael.childress@uky.edu.