Bermuda has done an exceptional job navigating this viral crisis from a health perspective. We are actually in excellent shape in terms of controlling the spread and the overall level of infections. But this is not translating into any significant positive economic momentum, especially for a swath of Bermuda’s domestic industries.The Covid cliff for our economy is fast approaching, and I would expect to see the significant and more negative ramifications to begin to develop over the next 30 days. This could include more business closure notifications, layoffs, and a general escalation of economic anxiety. Confidence crushedIf you want to see aggregate demand on the island rebound, you need to have consumer confidence return. Fear and cautiousness are prudent and appropriate in a pandemic. Still, we all must realise that this also crushes the economy. When people pull back from all forms of activity and reduce socialising, large swaths of our economy cease to operate or do so at levels that are uneconomical. We need to continue to promote protective health measures, but also should start focusing on the positive news and not solely propagating fear. For some reason, the good news is not adequately discussed. Maybe this is viewed as too hopeful, and perhaps optimism is considered to be less sophisticated and careless, but we actually have some positive medical developments to consider. For example, there are now three proven treatments for Covid-19:• Dexamethasone — a cheap, widely available steroid• Remdesivir — a broad-spectrum antiviral• Convalescent plasma therapyIt may be that more testing is needed to determine overall effectiveness definitively, but it is becoming abundantly clear that the medical community is now far better equipped to deal with severe cases. All this, of course, is not to suggest we become lackadaisical and careless, but it should instil some confidence in the general public. I was pleased to see the Premier begin to acknowledge and promote the safety we have in Bermuda in the latest press conference. It’s important that people are free to go back to restaurants, but they also need to feel they will not get sick from doing so. Tourism troublesYou book your flight. You secure your hotel room. Then you realise you have to do a series of Covid-19 tests while on holiday and should purchase travel insurance Although the testing cost of this is de minimis, the hassle and inconvenience may be too much for some to come to Bermuda. Plus, it may not be possible to get travel insurance, and even if you can, it may be financially prohibitive. So what do you do? You cancel your trip. You cancel your hotel room. From a safety perspective, of course, this makes sense. But, again, it is likely to cause pressure on the economics of the tourism industry. Airlift and available seats are also estimated to be only about 38 per cent of last year’s levels. I suspect that a few major hotels in Bermuda will not open for the summer season. This coupled with cruise ship cancellations, which look like continuing through the peak cruise season, will place immense pressure on a hospitality chain that employs about 3,000 Bermudians as well as a number of expatriates. It is worth noting the trickle effect of having this sector shuttered. Besides the loss of local jobs, if we send all the foreign workers home, who will pay rent to the Bermudian families that they rent from? WFH (working from home)I wrote recently that only about 30 per cent of service workers could effectively work from home. That being said, companies have almost assuredly elevated its acceptance by investing in the needed technology and acknowledging decent productivity. I often hear from people how great WFH is. When I hear this, I cringe. I feel the whole working-from-home shift has some rather extensive and negative consequences for Bermuda. The first is rather apparent and revolves around the City of Hamilton. Hamilton requires foot traffic. If we want to see a recovery in retail and restaurants, for example, we need to see full office buildings and people moving around the city buying lunch and dinner and shopping. If people remain at home or come into the office in reduced numbers via shift work or phases, then Hamilton’s economic activity will stay depressed and maybe not viable for a large swath of businesses. The trickle-down effect of this is very dire. Fewer people are now walking around buying breakfast, lunch or dinner. I suspect most restaurants are operating at 25 per cent of capacity, with the most fortunate restaurants running at only 50 per cent. One effect on retail, for example, is that staying at home ironically increases competition because people increasingly focus on searching for products online. Searches done from the comfort of your couch make price discovery easy and expands overall options. This can cost local sales, even if those local establishments have an online presence. I have not even begun to discuss commercial real estate, which will almost assuredly come under immense pressure as well. The other point to ponder when considering WFH, ironically, is its effectiveness. If we find it works and many jobs can be done remotely and anywhere, what is keeping them at a higher-cost domicile?Companies — and even employees — may seriously consider moving certain positions and maybe entire departments to less expensive locales with deeper labour pools. This, of course, is not new for the island and has been happening in a host of industries, but the sheer scope of the recent shift of WFH is exposing all sorts of options. On the margin, this could frustrate employment growth locally and much needed bodies in Bermuda. Promotion about how great WFH works for you and colleagues ironically may reduce what is desperately needed in Bermuda — more bodies. The economic substance argument that we are required to have jobs here seems marginal at best. We are not necessarily needed to have everybody here; only certain types of people.This again limits the pool of potential jobs overall, especially for specific jobs that could provide the training ground for young Bermudians or those with less specialised skills. As many young interns have learnt this year, it is much tougher to mentor someone if the boss is WFH. The optimists believe that WFH will put a spotlight on Bermuda; that Bermuda is a beautiful place to work. I am not overly convinced that this will drive a massive number of people towards relocating here, but it could provide an opportunity if we amend immigration laws to offer this as an option for some. The projections of a 7 per cent to 12 per cent decline in gross domestic product is not indicative of the local economy. The decline for local companies could be about 25 per cent — or more. The economic pain is more likely to be felt disproportionally among the lower wage earners and a much broader swath of workers domestically than what is being estimated in simple GDP calculations. The worst of the health consequences are behind us, but the economic Covid cliff looms large. It was imperative that we stayed home to stop the virus from spreading. Now it’s essential that we go out to prevent the spread of economic collapse. • Nathan Kowalski, who regularly contributes the column Financial Ramblings from The Rock, is the chief financial officer of Anchor Investment Management