As economy recovers, some changes may stay
If workers continue to work remotely, that could have a lasting effect on other businesses.
While there is a degree of uncertainty surrounding the exact rate at which the U.S. economy is recovering, growth is forecasted in 2021 and beyond.
But while the outlook will inevitably improve for some sectors, such as the leisure and hospitality industry, other business trends caused by COVID-19 may be here to stay, according to Leigh-Ann Wilkins, economic outreach associate for the Federal Reserve Bank of Philadelphia.
Speaking at the Berks Alliance Community Forum hosted by the Greater Reading Chamber Alliance, Wilkins indicated changes in commuting patterns could impact small businesses beyond the pandemic.
Specifically, if workers continue to work remotely on a full- or even part-time basis, that could have a lasting effect on businesses located near places of employment.
“Close to one-fifth of people report that they now work from home every day,” Wilkins said, citing a Federal Reserve survey. “The share of those commuting every day has dropped from around three-quarters to a half.
“Commuters generally shop at local businesses which are near their workplaces or their office. If a portion of them don’t return or return but at a lower rate, this will have an impact on the revenue of those businesses.”
Those structural changes could be far-reaching, as it may lead to a decrease in the type and volume of construction in certain areas, or have broad implications for the housing market as well, Wilkins said.
The rate at which consumers are shifting to e-commerce, while having decreased from its midpandemic spike, is still higher than it was prior to COVID — another potential hit for brick-andmortar retailers.
Such shifts could disproportionately impact cities and lowerincome communities which were already harder hit by the pandemic.
It wasn’t all doom and gloom, however.
With circumstances and data updating rapidly, economists face challenges trying to forecast an ever-changing landscape. Still, all indications are gross domestic product will continue its steady rise.
“Over the course of just a few months, forecasters have become a lot more optimistic about 2021’s GDP growth,” Wilkins said. “Most recent projections expect growth to be as high as 6.9%.”
Whether the economy will achieve or exceed those numbers though is still tied to whether or how quickly the U.S. can beat the pandemic.
“Much of this recovery depends largely on how quickly people feel they are able to return to their normal level of activities, which in turn relies largely on how quickly we become vaccinated,” Wilkins said.