Many thought that business would permanently shut their doors because of the COVID-19 pandemic, and while there were several small businesses that did indeed close for good, a new analysis shows the effects of the pandemic were actually not as bad as previously thought.
The new analysis from the Economic Innovation Group (EIG), relying on data from the U.S. Bureau of Labor Statistics, reveals that US businesses had more locations open in the third quarter of 2021 than pre-pandemic, around the same time a lot of pandemic era restrictions, requirements, and mandates were lifted.
While the pandemic did have a negative influence overall, especially on small businesses, the effect was not equal in every industry and location. The analysis showed that the number of physical business locations in the US has actually risen 7% higher than numbers from before the pandemic.
In terms of economic recovery, 74% of United States counties saw the number of physical locations for businesses recover to pre-pandemic levels in under two years. The analysis also shows that stimulus money also played a large role in helping with a quicker recovery.
“In fact, the share of counties actively shedding business establishments fell over the last two years compared with the prior, pre-pandemic, two-year window,” the analysis notes.
The analysis also found that business recovery was more likely to occur in regions with denser populations and where there were fewer pandemic-related restrictions on in-person business activities, notably in Southeastern and inland Western states.
Business recovery was slower in parts of the Great Lakes, metropolitan coastal areas, and the Midwest, but it is important to note that this trend does not apply to all areas, with some Eastern coastal regions experiencing notably rapid growth as well.
“One cannot safely say, for example, that cities suffered while outer suburbs or rural areas benefited, given the heterogeneity in each category,” the analysis points out. “Some of this scrambling of regional growth trajectories may prove permanent and others ephemeral”
In terms of industry growth, the analysis found that service-producing establishments grew at twice the rate of goods producers. The analysis also found that professional and technical services added 169,502 establishments nationwide, accounting for 23% of net establishment growth.
Freight trucking was another industry that the analysis noted as growing rapidly during the pandemic.
“For now, the economic effects of the pandemic and its aftermath continue to substantially alter the landscape of American business growth,” the analysis concludes.
© Copyright IBTimes 2022. All rights reserved.