Sector Impacts of Coronavirus (COVID-19)

While individual industries feel the impacts of coronavirus and the subsequent economic impacts very differently, looking at the impact of industry sectors allows us to draw conclusions and see trends across various industries operating in a similar space in the overall economy.

Each economic sector of industries includes a summary developed by our research team and information pertaining to the industries within that sector.

We have also curated data for Canadian Economic Sectors, and those are found here as well.

How US Sectors Are Affected

Sept 15, 2020 – Some segments of the management and administrative services sector are benefitting and others are hurting significantly by the fallout from coronavirus. All states have taken steps toward reopening. Daily new coronavirus cases in the US fell steadily for most of August after a spike in July led by hotspots in Texas, Florida, Arizona, and California. However, as of September 14, the reopening plans of more than 15 states remained paused or rolled back.

A recent report by Deloitte ranked 20 major industry sectors according to the risks workers face in possibly encountering the coronavirus on the job. Risk factors taken into account include contact with others, face-to-face discussions, exposure to disease or infections, and physical proximity to others. The rankings run from 1-20 with 1 being the lowest risk and 20 being the highest. Administrative Services was ranked at 13, but risk varies among the 12 major occupations in the sector.

While the spread of COVID-19 has slowed, daily new US cases remain stubbornly high, and averaged about 35,000 in the first week of September. A continued emergence of new hotspots is likely going to prolong the recovery period for travel agencies, tour operators, and convention and trade show organizers. These firms have witnessed a rapid and severe decline in travel and gatherings, as businesses and consumers attempt to avoid close contact and closed-in spaces like convention centers and airplanes. Businesses and organizations have cancelled or postponed events and consumers have cancelled vacations. International travel largely ceased, due in part to fears of challenges trying to re-enter the US. The rise in US COVID-19 cases prompted the European Union to leave the US off its list of approved countries as it opens travel back up. The move effectively bans US travelers from entering the EU. There could be an extended period of time after the coronavirus subsides before businesses and consumers are comfortable enough to resume travel.  According to the Deloitte rankings, administrative and support roles – which include travel arrangement and reservation services – have medium scores for physical proximity to others as well as for face-to-face discussions.

Travel-related firms are losing commissions and receiving credits instead of refunds from suppliers on postponed bookings. TSA screened just 704,075 airline passengers on September 8, 2020 compared to over 1.9 million the same day a year ago.

Temp services are trying to place workers as demand in some industries has risen while employment in other industries has plummeted. For the week ending September 4, job postings in Indeed increased for construction and positions involving loading, stocking, and driving. Job postings remained weak for hospitality and tourism, banking and finance, and software development. As more industries in more states gradually open up, temp service demand could rise further. Temp services have medium risk for face-to-face discussions and proximity to others, according to Deloitte.

Segments in high demand include facility support services and janitorial firms which are at the front lines of cleaning and sanitizing buildings to prevent the spread of coronavirus. Duct cleaning companies and maid services may also see an uptick in demand as consumers and businesses look to sanitize their properties. Amid the opening up of more businesses, cleaning service demand is likely to rise to ensure facilities are sanitary.

With some states easing lockdown restrictions, businesses that serve the public may hire additional security personnel to help ensure social distancing practices are observed. Key areas of demand include retail, branch banking, and healthcare. Security guard firms are also consulting with managers of offices and other facilities about distancing, enforcing the wearing of masks, temperature checks, and other safety measures as more people return to work. Protective services – which includes security guard firms – are high-risk due to the frequency of face-to-face discussions, according to Deloitte.

Segments less affected include landscaping services, and pest control services. Landscaping firms could see fewer new projects if construction development slows or property owners decide to postpone investing in large outdoor renovations. Some pest control services are supplementing their income by providing cleaning and disinfecting services.

Services like pest control, landscaping, and janitorial services have medium scores for physical proximity to others as well as for face-to-face discussions, according to the Deloitte rankings.

During the lockdown, waste management services saw a shift in garbage volume from commercial to residential as people worked from home, sheltered in place and avoided public places like restaurants. As more businesses reopen, levels of residential and commercial waste may begin to shift back toward the pre-pandemic balance. Industry insiders suggest waste management companies may be pressured to reduce fees as municipal contracts are renegotiated and renewed. Local governments are expected to look for ways to trim budgets amid falling tax revenue. Waste management and remediation services revenue fell more than 12% in the second quarter of 2020 compared to a year earlier, according to the US Census Bureau. According to the Deloitte study, industries involved in transportation and material moving – which includes waste management – are at medium risk for physical proximity and face-to-face contact.

Segments that will see increased demand as the epidemic subsides are collections agencies and repossession services.  Businesses and individuals who lost income due to shutdowns during the height of the epidemic may struggle to make payments on utilities, loans, credit and medical bills. The CARES Act provides some safeguards for consumers in terms of payment forbearance. Businesses are also offering temporary forgiveness for late payments. Collections firms are considered part of the business services industry and therefore have medium scores for face-to-face contact and physical proximity to others, according to Deloitte.