San Francisco: The Unfolding Economic Impact of COVID-19
Although more than 77 percent of business leaders in the San Francisco-Oakland-Hayward, California metro statistical area (MSA) believe the novel coronavirus pandemic will have an intensely negative effect on their companies, they expect that impact to be short-lived. More than 62 percent expect to revise their expectations for their companies for 2020, mainly because of decreased consumer spending and a hit to employee attendance and productivity. And nearly three quarters (74 percent) believe they’re doing all they can, as employers, to slow the pandemic’s impact.
Those were the key findings of a proprietary survey ThinkWhy conducted of business leaders in six U.S. MSAs that have been seriously impacted by COVID-19, including San Francisco. Data from the poll, which was conducted to measure overall sentiment about the pandemic and its business impact, was collected from 500 business leaders from March 14 through March 19. The businesses surveyed have from 21 to more than 3,000 employees and represent every major industry.
Prior to the onset of the pandemic, ThinkWhy’s LaborIQ™ Rankings Index listed the San Francisco MSA as the nation’s 11th healthiest MSA. But with shelter-in-place restrictions imposed on the region beginning on March 17, resulting in millions of people ordered to stay home except for essential needs, businesses in multiple industries ground to a halt. California Governor Gavin Newsom followed with a statewide shelter-in-place order on March 19.
The Pandemic Will Transform How Specific Industries Function
In the ThinkWhy Research survey, San Francisco business leaders said they expect to be most negatively impacted by “Reduced Time and Attendance of Employees” (47.8 percent) and “Inability to Staff the Company Appropriately” (47.8 percent). Being tech-dominated, San Francisco’s employment landscape is led by the Professional and Business Services sector, which boasts 20.6 percent of the metro’s jobs. Jobs in that white-collar sector are uniquely adaptable to work-from-home opportunities.
A director of technology at a small manufacturing company in the area told ThinkWhy, “We are going to increase remote jobs for employees in some departments. We are also going to create a plan to deal with this crisis as it unfolds in the next month.”
The metro’s second- and third-largest employment sectors are Trade, Transportation and Utilities (15.2 percent of all jobs in the MSA) and Education and Health Services (14.7 percent of all jobs). The former is likely to see significantly reduced traffic and supply-chain disruptions because of COVID-19, while the outlook for the latter is mixed. Education is apt to be hit hardest as schools shutter, and remote or virtual learning is still an untested method. The Healthcare and Social Assistance subsector will be busy but stretched thin for personnel as the pandemic intensifies. In response to COVID-19, San Francisco Mayor London Breed ordered the Department of Public Health to speed up the hiring of nurses and other front-line healthcare workers from six months or longer to recruiting them “on the spot.”
Due to the coronavirus, Professional and Business Services; Trade, Transportation and Utilities and Education and Health Services in San Francisco all are sure to experience sweeping changes over the next few months in terms of job growth and job gain. For January 2020, the U.S. Bureau of Labor Statistics put the MSA’s unemployment rate at 2.7 percent. But on March 26, it was announced that advance weekly unemployment claims in California spiked to nearly 187,000 for the week ended March 21, up from about 58,000 in the previous week. Governor Newsom said the state had received 1 million jobless claims since March 13.
San Francisco Metro Business Leaders See Some Positive Outcomes
On the positive side, 74 percent of San Francisco respondents to ThinkWhy’s survey believe their organization’s communications protocol in response to the pandemic has been “good” or “very good.” This is despite the fact that only 49 percent of respondents indicated their companies were adequately prepared to handle such a challenge. In addition to increasing the cleanliness of their facilities, business leaders identified “positive outcomes” from COVID-19 as an improvement in both their corporate communications and critical response capabilities.
San Francisco business leaders also said that regardless of what’s happening around them, they are making the needs of their employees a top priority.
“We will put our employees’ safety first. If necessary, we will close stores, but we will work hard to maintain supplies for online purchasing,” stated a director at a large retail chain.
The head of operations in the construction industry added, “We will increase safety precautions for our employees, with a priority on sanitation. At this point, every citizen needs to help one another.”
Results of the ThinkWhy Research survey from the other MSAs profiled are listed below:
- New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
- Seattle-Tacoma-Bellevue, Washington
- Las Vegas-Henderson-Paradise, Nevada
- Miami-Fort Lauderdale-West Palm Beach, Florida
- Los Angeles-Long Beach-Anaheim, California
ThinkWhy continuously monitors and forecasts industries and MSAs for impact.
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