Location, location, location.
That credo about being the top three priorities when buying real estate also applies to some of the business-related changes wrought by the COVID-19 pandemic, according to one of the state’s top economists. The virus has fundamentally shifted where people work and who is doing the work.
Speaking at the recent Utah Economic and Energy Summit, Natalie Gochnour used the phrase “Home Sweet Office” to describe the move by many employees to work at home rather than the traditional office.
“I don’t believe there will be another home built in this state without having accommodations for a home office,” said Gochnour, director of the Kem C. Gardner Policy Institute at the University of Utah. “This is a structural change in our economy that I believe will live on.”
Working from home is only part of the stay-at-home trend brought on by the pandemic — what Gochnour called “nesting as a society.” Among the results of that trend are gross taxable sales in Utah growing from year-earlier totals in the categories of furniture, gasoline and home and grocery stores but slipping for clothing, arts and entertainment, hotels and restaurants.
Many of the people remaining at home are women, but they’re not necessarily working for companies. Gochnour said many have left the workforce entirely because the pandemic has been particularly hard on women and many of the occupations that employ women, including nursing, education, flight attendants, food service workers and hotel service workers.
It’s a “pink-collar recession,” she said, hallmarked by more women leaving the workforce than joining it in April, and a similar surge in September when some children remained at home for their schooling. The ramifications could last well beyond the end of the pandemic.
“This creates a major challenge in their professional careers and in their family finances as women step out of the labor force, lose seniority [and] take away from their career trajectory,” Gochnour said. “It’s really important for their families, but it has a long-term impact on their ability to earn.”
Commercial office space likewise is “really being challenged through this pandemic” and is seeing an acceleration of trends that already were underway, she said. The number of people eating at restaurants is down from a year ago; ordering food online or over the phone is up. But restaurant reservations are still 30 percent below what they were in February. Restaurant and bar sales are down, as are hotel room stays. Meanwhile, the number of Salt Lake City International Airport travelers is only halfway back to what could have been expected without the pandemic.
“Business travel will not ever be what it was again, because we’ve adapted and changed as a society, and this will mean that there’s a difference in the demand for hotel rooms,” Gochnour said. “It doesn’t mean that there won’t still be dramatic growth in hotels in the future, but it will be less than it otherwise would have been.”
The pandemic has led to a recession that has been “sudden, severe, uneven and long-lasting,” Gochnour said. But Utah nonetheless is faring among the best states in the nation economically. For example, Utah’s job-change figures in September were down 0.9 percent from a year earlier, but the U.S. total was down 6.4 percent.
Utah has been able to rebound a bit from the pandemic recession, far earlier than has the nation’s economy, she said. Utah in April was roughly where the U.S. is now.
“It’s approximately where the U.S. is today,” Gochnor said of the April situation in Utah. “So, at our very worst, seven months later, the U.S. is there.”
But the impacts have been uneven in Utah. The unemployment rate in eastern Utah has jumped because of the harmful effects of the pandemic on the energy and tourism industries. Utah’s natural resources sector has seen job numbers fall 11.6 percent from a year earlier and the leisure/hospitality services sector has slipped 15.7 percent.
The summit was supposed to take place both in-person and online but was switched to online-only at the last minute due to a virus surge. It was the first-ever summit focused on both the economy and energy instead of being separate events.