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City Manager Mark Freitag speaks during a State of the City address at Janesville City Hall. Freitag said the city is in a better position to recover from the economic difficulty caused by the coronavirus pandemic than it was from the Great Recession.

JANESVILLE

City Manager Mark Freitag expects the diversity of the city’s economy to help it rebound from the economic downturn wrought by the coronavirus pandemic, but some sectors will likely take longer to recover than others.

The city is in better shape to recover from this downturn than it was during the Great Recession, Freitag said.

Since 2008, the city has seen growth in the distribution, food production and health care industries, which typically fare better than others during times of economic uncertainty, Freitag said.

Mercyhealth and SSM Health systems, which operate Janesville’s two hospitals, each announced sweeping furloughs as the pandemic emerged, but relief should come soon to the health care industry as elective surgeries and other services continue to come back online, the city manager said.

Freitag is more concerned about the leisure and hospitality sector, which will likely take longer to recover, he said. The coronavirus is still present in the community, making people leery of travel and other recreational activities.

Freitag answered the following questions from The Gazette on Thursday.

Gazette: How do you think Janesville is doing in following safety recommendations one week after the county’s safer-at-home order was lifted?

Freitag: The community is overall doing well and people are cooperating with social distancing measures, he said.

The police department and city staff are fielding fewer complaints from residents concerned about businesses not following guidelines than they were a couple of months ago, Freitag said.

City officials continue to encourage people to wear masks in public, and Freitag said he wishes more people would do so.

Gazette: How big of a hit did the economy take these last couple of months?

Freitag: Unemployment statistics released this week showed the effect on the Beloit-Janesville metro area was larger than city officials anticipated, he said.

Janesville’s unemployment rate in April was 18.4%. City officials had estimated 12%, Freitag said.

Gazette: Do you expect the unemployment rate to begin decreasing now as businesses reopen?

Freitag: In a normal recession, you typically see the economy slow down gradually, but the pandemic delivered an instant shock to the system, Freitag said.

Trends seen in economic downturns of the past likely won’t hold up under these unusual circumstances, but Freitag said the unemployment rate should begin improving as businesses reopen.

Gazette: How helpful do you think the city’s microloan program will be to local businesses?

Freitag: The microloan program will help fill a gap left by national, state and county business aid programs, he said.

Some small, independent businesses will need help with the basics such as rent and utility payments, and this program can help cover those costs. Freitag said the city will be able to help at least 20 businesses, which will have a positive effect on the overall economy.

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