COVID Economy: Sinkers and Swimmers

In Buzz, October 2020 by Raleigh MagazineLeave a Comment

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While virtually all global, national and regional industries have been impacted by the COVID-19 pandemic, Raleigh, Wake County and the Triangle are in a good position to make a swift recovery. In fact, Forbes magazine ranked both Raleigh and Durham as top U.S. cities poised to bounce back from the coronavirus, along with other mid-size cities across the country. “Some industries were able to adapt, either because the work could be done at home or the ‘office’ was ‘easy’ to make safe,” said Jennifer Miller, the vice president of marketing and communications for the Raleigh Chamber of Commerce in an email to Raleigh Magazine. “Through [an] existing industry survey conducted in June, only 10 percent of businesses surveyed reported little to no impact from the pandemic at that time.” 

Using data provided by the Chamber, we take a look at some local industries that are doing well in the COVID economy, and those who are struggling. 

As of August 31 in Wake County,  there are
36
active projects, or companies considering an expansion or relocation to the area
7,400+ anticipated jobs from these active projects
$1.5 billion+ in investment

By industry, active projects include headquarters, shared services, advanced manufacturing, life sciences, software and clean technology. Most activity is in advanced manufacturing, life sciences, headquarters and shared services.

Project Activity
October 1, 2019 – August 31, 2020

77 company announcements
5,976 jobs created
$406 million in investment 

During the pandemic, the following companies announced investment in Wake: 

Bandwidth announced a new global headquarters, moving from NC State Centennial Campus to a new location in west Raleigh. Bandwidth will bring 1,100+ jobs to Wake County in this expansion project.

Envestnet, a financial technology company headquartered in Chicago, expanded its Raleigh presence with the addition of 148 new jobs. 

Hansae, a South Korean company, selected Garner for a PPE manufacturing facility, further adding to the region’s list of more than 700 international companies.

Microsoft announced the creation of 500 new jobs, expanding the company’s growing presence in Morrisville.

Sinkers

Hospitality

It would seem obvious that businesses directly linked to travel and events—air travel, conferences, event rental, rental cars but also, retail and restaurants—are having a hard time. “The businesses and spaces that make our community vibrant, ‘main street businesses,’ have been the most impacted by the pandemic,” said Miller. “Public health policies to reduce spread of the virus and flatten the curve have had an initial impact but now, as the pandemic persists in the community and across the nation, there is a lack of demand in these services and a lot of uncertainty as to when we will see pre-COVID demand in Wake County and the region.”

Wake County saw a drop in the prepared food and beverage, rental vehicle and room occupancy taxes of 36 percent by April, 49 percent by May and 66 percent for June, July and August compared to 2019, according to Wake County tax record data. This translates to a 30 percent drop in employment in July of this year from July of last year. 

Health Services

Counterintuitively, in-person health care visits have been down across the country. Employment data show there has been a 16.3 percent reduction in this workforce from July of this year to July of last year.

Swimmers

Financial Services

Banks and other financial services were paramount in supporting all industries through federal stimulus programs (CARES Act), and the financial services industry saw little to no job loss due to the pandemic, Miller said. In fact, in Wake County, there was no difference in the July employment numbers of 2020 compared to 2019.

Construction

Construction saw a small loss in employment since the start of the pandemic but the industry seems to have turned a corner. Looking at data from this July, there is a .5 percent increase in employment for the mining, logging and construction industry over July of last year. 

IT/Software, Professional Services and Business Services

“Industries that really define our region have seen relatively smaller impacts in their business so far,” Miller wrote. Labor data information shows a 3.9 percent and 2.1 percent fall in employment between July of 2020 and July of 2019 for these industries. They often have business-to-business models and companies, including Bandwidth, Citrix and Cisco, provide services to all industries; many of these services were in high-demand since the start of the pandemic. “The majority of the jobs in these industries are both high skilled and paying, which is part of the reason we see our market across several publications as being touted as a place that will be quicker to recover,” Miller added. 

Life Sciences

Life sciences companies, including manufacturing and professional and business services, have also faced little impact from an employment perspective and in terms of activity. This is for a couple of reasons, according to Miller:

1. Globally, this industry has not seen a large fall in demand; people are still buying medicine and therapeutics.

2. There is a lot of attention on this industry particularly with a focus on a vaccine, but also in therapeutics to combat COVID-19.

3. There is a lot more funding in this industry due to COVID. 

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