4 Economic Trends Influenced by the COVID-19 Pandemic

By Mariliana Fotopoulou Wednesday, August 12, 2020

The current global pandemic has profoundly impacted the US economy, with many employment and business statuses being put at a halt. With the coronavirus still existing and no cure to be found, most states have made wearing masks mandatory.

Changes have been made to the economy, such as working hours being reduced in the bar and hospitality sector. Most companies such as Twitter have chosen to permanently work from home, whereas others will work remotely only temporarily.

Businesses in the travel, restaurant, and hospitality industry were especially affected, due to the huge decrease in tourism and travel restrictions that had to be implemented. These industries will take a long time to recover, with international travel being able to resume once businesses feel more secure in having a vaccine available.

While some businesses and market sectors may be crashing or close to bankruptcy, others have made a temporary profit or growth, due to the current situation. There has been more success for companies online and tools needed by businesses to operate virtually.

We have narrowed down four economic trends that have been influenced by the current pandemic.

The Property Market

For the first time in many years, the mortgage rate has hit an all-time low. After the second week in August, the mortgage rate has hit 2.88% and the week before that being at 2.99%. Properties that are for sale are limited, while millennials seek the opportunity for the low mortgage rates to invest in properties.

According to statistics, the US had hit a value of $88.4 billion in the property market for June. The market has been growing since 2017, but a new economic trend shows that those who have certainty with their jobs and businesses can invest in the property market.

However, it hasn’t been good news for all property owners; for Airbnb and apartment rentals have been greatly affected by the coronavirus due to the country’s lack of tourism, nationally and internationally.

Ecommerce Businesses

For the first half of the year, most everyone was put in lockdown, and ecommerce companies saw a huge increase in profits. According to statistics, the e-commerce business worldwide is predicted to be $3.9 trillion for 2020. The US alone spent a total of $500.47 billion online.

Amazon is one example of an e-commerce business that made a profit in the first quarter of the year of $59.7 billion and a net income worth $3.9 billion. CEO of Amazon Jeff Bezos is now worth $190 billion, thanks to the huge increase in online shopping this year.

However, companies such as Apple were greatly affected by their online store. There was a shortage of production for their products and slow exportation from China to countries worldwide. However, the company did reach a revenue of $27 billion this year, as employees and students bought products for work, communication, and entertainment.

Supermarkets

With the coronavirus being a serious situation, many shoppers were bulk buying in supermarkets to survive during uncertain times. According to statistics, the supermarket industry is worth $682 billion in the US, with the biggest companies such as The Kroger Co., Albertsons Companies Inc and Publix Super Markets Inc being examples of gaining profit from this industry.

The average industry growth from 2015 until 2020 is 1.2%, with a 0.5% increase this year, due to the lockdown and the pandemic. Toiletries and bulk buys for food were the most popular items for purchases this year.

Mobile Apps

Given that there are limitations in movement, social media and mobile apps are hitting a huge spike in profits. American mobile app and social media companies such as Facebook have a revenue of $17.44 billion from the first quarter of the year alone. In March, however, the demand for ads fell since businesses had to stop running temporarily. But there was an increase again showing normal activity by April.

The coronavirus didn’t affect all apps completely, with WhatsApp being a prime example of 90% of users using it worldwide and generating a $700 million revenue yearly. Zoom is another example that grew rapidly during the pandemic, with it being worth over $300 million this year. Mobile apps that were not picked up within the last few years have become a great use this year and have generated a great amount of income that has contributed to the US economy.

About the Author


Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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