The longer the Pandemic drags on, and work-from-home gets entrenched, the further Old Normal moves out of reach.
By Wolf Richter for WOLF STREET.
There has been a recovery of sorts, but it has been frustratingly partial and in some areas, such as office occupancy, even minimal, with many peculiar shifts, twists, and turns – each with losers and winners: That’s what real-time data trackers are pointing out.
The AEI released its latest weekly Foot Traffic Index for 40 metro areas in the US today, based on cellphone GPS data from Safegraph.com. The index was put together to track the recovery from the Pandemic. The seven-day moving average tracks daily visits to “points of interest,” such as stores, malls, restaurants, hotels, movie theaters, airports, hospitals, other places of commerce, and other points of interest, and visits from employees.
In the chart below, each line represents one of the 40 metros. It compares foot traffic in the current week to where foot traffic was in the week ended January 15. A value of 100% would mean foot traffic is back at its January-old-normal level.
The bold lines are Kansas City, Virginia Beach, Pittsburgh, Seattle, Los Angeles, and San Francisco, with Kansas City being the red line at the top (74%) and San Francisco being the greenish line at the bottom (43%), just above San Jose (42%). This means that foot traffic in Kansas City is 74% of where it was in the week ended January 15; and that in San Francisco, foot traffic is 43% of where it was in the week ended January 15.
Note the curve of Kansas City. It was near-V-shaped, up from the trough of 38%. But then the city began to experience a major outbreak of Covid-19. The city and the people are now trying to stay safe and contain the outbreak (click on the chart to enlarge it):
The second bold line from the bottom is Los Angeles (47%). It’s sandwiched between the thin lines of Phoenix (52%) and Miami (47%), just above Orlando (46%).
Here are the 40 metros, with the foot-traffic percentages in the week ended August 9, and the foot traffic percentages during the low point:
|Metro||Week to Aug 9||Trough|
|Kansas City, MO||74%||38%|
|Virginia Beach, VA||67%||38%|
|St. Louis, MO||66%||35%|
|San Diego, CA||59%||27%|
|San Antonio, TX||59%||34%|
|Las Vegas, NV||53%||22%|
|New York, NY||53%||24%|
|Los Angeles, CA||47%||26%|
|San Francisco, CA||43%||25%|
|San Jose, CA||42%||25%|
Foot traffic into the security zones of airports – the TSA’s daily checkpoint screenings, a real-time indication of how many people are flying – shows similar stall in the recovery, but a much lower levels, still down about 70% from a year ago.
I can sort-of confirm the San Francisco foot-traffic score of 43%.
Nearly all of the tourists from overseas are gone, based on my observations from the touristy part of the city where we live. For office workers, working from home is huge here. Companies in the Bay Area have pushed out the date when people should return to the office. Google moved its return-to-the-office-date to at least July 2021. Other companies are now implementing work-from-home as a permanent feature or option, such as Twitter. With many startups, there are doubts if there will be even a company to return to.
Restaurants can be open, but only for outdoor dining, take-out, or delivery. You get used to eating in 59° windy and foggy weather (this is summer, after all). But lack of sidewalk space makes this impossible for many restaurants. In other places, street-parking in front of the restaurant has been converted into a seating area. Many restaurants have switched to take-out only. A large number of restaurants are closed and may never reopen.
Gyms, pools, the building of my swim club, and the like are closed. But the beach is open, and it’s free, and livelier than ever, and the water is nice, and I have never seen so many people swim in it. Pool swimmers are discovering cold-water swimming and the beauty of the Bay.
And due to the renewed surge of the virus in the City, some of the reopening steps have been put on hold or were backtracked. So foot traffic in San Francisco at 43% of January levels seems about on target.
Are people going to the office yet? Um…
The sudden reality of working-from-home for many office workers, and their eventual return to the office, can be tracked by collecting data from access control systems, such as keycards, key fobs, and access apps. Kastle Systems – which provides access systems for 3,600 buildings and 41,000 businesses in 47 states – has been releasing its own weekly Back to Work Barometer, based on the data it obtains from its access systems in 10 large metros.
Office occupancy collapsed in March and April as people stopped going to the office, and the 10-metro average hit a low of around 15% – meaning that office occupancy, as measured by employees entering the office, was down 85% from pre-Pandemic levels. Then there was a mild recovery. But the recovery stalled in mid-June. The average of the top 10 metros (red line in the chart) is at 22.6%, just below where it had been in the week of June 17. I added the black horizontal line, from the current value of the top-10-city average (click on the chart to enlarge it):
In Dallas and Los Angeles, where office occupancy has been higher than in the remaining eight cities if the barometer, it still was only 34.9% and 31.9% of pre-Pandemic levels. The New York metro is at the bottom with an occupancy of 11.7% — meaning occupancy is still down 88%. San Francisco is just above it, with an occupancy of 13%. This becomes eerily clear when you walk around the Financial District during what used to be rush hour.
The longer the Pandemic drags on, the more people and companies will change permanently – some of it for the better, some of it not, followed by economic adjustments across the spectrum, of the type we can already see the beginnings of, from commercial real estate to where people want to live and work. And the Old Normal moves further and further out of reach.
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