New York City: The Unfolding Economic Impact of COVID-19
COVID-19’s rapid impact is felt more acutely in heavily populated metro areas. To gain more insight into how employers are adapting to meet the changes brought on by the pandemic, ThinkWhy surveyed over 500 business leaders from six metropolitan statistical areas (MSAs) that have been dramatically affected by the virus, including the New York-Newark-Jersey City, New York-New Jersey-Pennsylvania metro area.*
The survey results there are especially illuminating because New York City has been called the pandemic’s epicenter, with 40,900 coronavirus cases reported of the state of New York’s 75,795 cases as of March 31.
Pandemic Influences New York City-Area Business Planning
The survey, which collected data from March 14 to March 19, identifies how New York City-area business leaders have reacted to the pandemic, and how COVID-19 is influencing sentiment. A reported 78.8 percent of New York City respondents are revising their revenue expectations because of the outbreak. An identical percentage believes the pandemic’s effects on their organizations will be intense but short-lived.
New York City business leaders are also paying close attention to their company cultures during the turbulence. Businesses are relying on their communication efforts, as 81.0 percent of respondents agree that their employers are doing all they can to stop the spread of the coronavirus, and 71.0 percent think their organizations have handled corporate communications well during the pandemic.
Prior to the onset of COVID-19, ThinkWhy’s LaborIQ™ Rankings Index listed the New York-Newark-Jersey City, NY-NJ-PA MSA as the 50th healthiest market in the country. Before the virus hit, the New York City metro had been struggling with population growth, with more than 100,000 residents leaving the area - mostly due to high costs of living. The pandemic has had a devastating effect on the metro, which reported 281 deaths from COVID-19 as of March 26, accounting for 73 percent of deaths in the entire state of New York.
New York City metro employment is dominated by Education and Health Services, at 21.0 percent of total employment. Business leaders in the metro have concerns about the healthcare industry’s ability to respond to, and recover from, the pandemic. As healthcare system resources become strained from the outbreak, leaders are concerned about the industry’s ability to maintain staffing and productivity levels.
The New York City metro’s next top industry is Trade, Transportation and Utilities, at 17.7 percent of total employment. With international trade, retail and transportation severely hampered due to the pandemic, this sector is expected to experience significant decline.
Business Leaders Don’t Feel Prepared for the Pandemic
Though there is opportunity for some organizations to grow, the sentiment among New York City business leaders is that their companies are not adequately prepared to handle the challenges brought on by COVID-19. More than 90 percent of respondents say productivity and staffing will be most negatively impacted by restrictions imposed by the pandemic. In addition, 37.3 percent of respondents cited decreased consumer demand as a major hit to their business.
"We will spend all of our time focusing on our current customers, rather than acquiring new ones,” shared a director of a New York construction firm.
New York City business leaders do see a bright side, though. Half of the respondents indicate that hygienic practices at their offices will improve, and most say that enhanced corporate communication and the creation of a critical response team would mitigate challenging outside forces.
The country faces uncertainty on how the economy will rebound from the current pandemic. However, with the $2 trillion stimulus package becoming law on March 27, many businesses and industries will soon receive some relief during this crisis. Despite this lifeline, many business leaders are still concerned, including the New York City ones ThinkWhy surveyed.
When ThinkWhy asked business leaders to rate, on a scale of 1-10 (1 = strongly disagree and 10 = strongly agree), how sure they were about the pandemic’s lasting impact on the U.S. labor market, respondents rated it 7 out of 10. On whether the pandemic would take a year-long toll on the U.S. economy, results concluded 7.3 out of 10. New York City business leaders had a mixed response – a 5.9 out of 10 rating – when asked whether the media and markets have overreacted to the COVID-19 pandemic. Regarding the U.S. economy’s ability to rebound quickly, respondents gave it a 5.8 out of 10.
COVID-19 Leads to a Rapidly Changing Business Environment
Other industries in the New York City area expected to be negatively affected by the pandemic include in-person services, retail, financial activities, manufacturing and construction. Some of these industries – along with government, education and healthcare – may see remote work as problematic. Business leaders are closely monitoring how long services in these industries will be restricted or put on hold before the strain grounds businesses to a complete halt.
"We will prioritize and fortify the more critical business operations and follow recommendations by the CDC, federal and state officials with respect to social behavior and its application in work environments," stated a director working in Utilities.
The ThinkWhy Research survey also found that New York City respondents from businesses with fewer than 100 employees – as well as those with 3,000 or more employees – view increased operating expenses as a concern. While leaders of small businesses viewed the creation of a response team to COVID-19 as a challenge, businesses with 3,000 or more employees saw creating such a team as a positive opportunity.
Results of the ThinkWhy Research survey from the other MSAs profiled are listed below:
- San Francisco-Oakland-Hayward, California
- Seattle-Tacoma-Bellevue, Washington
- Las Vegas-Henderson-Paradise, Nevada
- Miami-Fort Lauderdale-West Palm Beach, Florida
- Los Angeles-Long Beach-Anaheim, California
The statement in this report are current as of the time of publication. ThinkWhy continuously monitors and forecasts industries and MSAs for their impact on companies.
Stay current with us. We are here to support organizations and provide insights during the economic downturn as well as the recovery phase.
The ThinkWhy Research survey
A proprietary poll of 500 business leaders in six major metros were surveyed by ThinkWhy to understand overall sentiment and business impact of COVID-19. Survey data was collected from March 14 through March 19, 2020. Businesses range from 21 to 3000+ employees with sentiment collected at every major industry level.