Tuesday, March 24, 2020

Bracing for the Covid-19 Recession

We know a recession is coming. It's likely to be severe. But the severity will vary by geographic area, according to a Brookings analysis. "In a huge nation made up of diverse places and varied local economies, a look at the geography of highly exposed industries makes clear that the economic toll of any coming recession will hit different regions in disparate, uneven ways," say Brookings researchers Mark Muro, Robert Maxim, and Jacob Whiton.

The researchers examined employment by metro area in the five industries most vulnerable to a coronavirus disruption—mining, transportation, employment services, travel arrangements, and leisure and hospitality. Overall, 24 million people work in those industries—16.5 percent of all workers. But in some metropolitan areas the share is much higher, and that's where the coming downturn could hit hardest.

Among the 100 largest metro areas, Las Vegas is most vulnerable, with 34 percent of its jobs in the five most affected industries. Also among the top five are Orlando, New Orleans, Honolulu, and Oklahoma City. Tech-oriented university towns are likely to be least affected by the Covid-19 Recession, say the researchers. Among the 100 largest metro areas, the five least exposed to the recession's effects are Provo, Utah; Durham-Chapel Hill, North Carolina; Hartford, Connecticut; Albany, New York; and San Jose, California.

"While essentially all of America will likely be affected by Covid-19's economic effects, those effects will be distinct and varied from place-to-place," conclude the researchers.

The Brookings researchers published this report on March 17, one week ago. That's ancient history for an exponentially expanding virus. So, one of the concluding comments in the report may be the most pertinent: "In the event the pandemic tips the economy into a significant nationwide recession, very few places or industries will emerge unscathed. And if that happens, other large sectors—including construction, manufacturing, retail,  education, and even the motion picture industry will be affected regardless of geography."

Source: Brookings, The Places a Covid-19 Recession Will Likely Hit Hardest

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