Economic News – December 2020December 18 2020
Covid-19 Economic Impact on Solano Economy
Unemployment continues to decline in Solano County with reductions in every city, now all under double-digits, however, when looking at the underlying cause, this is not necessarily positive news. While in the most recent months unemployment rate reduction was driven primarily by employment increases, unfortunately the decline last month was due to an increase of those leaving the labor force, the denominator of the unemployment rate equation. During the month, employment actually dropped by 2,200 jobs, while 4,000 left the labor force.
Employment from jobs within Solano County showed some progress over the past month, but this has slowed. Total Non-Farm jobs within the County increased by 600 jobs. The bulk of the increase occurred in the Retail sub-sector within Trade, Transportation & Utilities, adding 800 jobs; likely holiday hiring. Conversely, as we move away from “building season”, Construction, which has been a strong point in the local economy, declined by 200 jobs. All other sectors remained relatively stable during the month.
The graph above shows two pieces of information: in orange, the net increase or decrease in jobs from March to October. In blue, that additional change from November’s estimates. Manufacturing job growth was neutral in November, Professional & Business Services experienced the largest decline in jobs, 400. Leisure & Hospitality, which contains Food Services and Restaurants experienced a small increase, very little in comparison with losses during the year to date.
With the new “stay-at-home” state mandate as a result of a sharp increase in Covid-19 infections and decline in hospital capacity, we are likely to see another decline in “store-front” businesses. These are businesses that rely on walk-up customers, including restaurants, retail, and business services. Much of these activities have been restricted for the near future.
Overall, we may be seeing in this data is really the capacity of jobs that are likely to be returned in a “Covid-19” economy, where consumer activities have shifted to goods (growth primarily in on-line purchases) rather than services. Trend-wise, the data reflects what we are experiencing nationwide and is both a reflection of changes in supply (Covid-19 restrictions) and demand (consumer behavior).
The economy has shown an ability to adapt, which has been important in an effort to preserve and even grow jobs. A greater understanding of how to reduce virus spread on factory floors, offices and in public gathering spots has been a factor in the recovery of some jobs. Finding new and creative ways to serve the customer utilizing electronic platforms, alternative property uses, and creative promotions will allow many businesses to survive the coming months until restrictions can start to reduce the infection rate/improve hospital capacity numbers, and/or virus spread is under control via vaccine.
Overall, we are seeing light at the end of the tunnel with the approval and distribution of the vaccine, but as we all know, there are several months before widespread inoculation will impact total numbers and in turn, the economy.
We want to wish every one a safe and enjoyable holiday season. See you in 2021!
The Solano EDC is a private non-profit organization created to improve the economic health of Solano County. Solano Economic Resource Center (SERC) is a division of the EDC and provides economic research and marketing services for organizational partners, investors, and local jurisdictions in Solano and beyond. For inquiries please contact Robert Burris at email@example.com .