I was reading some interesting articles this past week about how various components of our economy/society will be permanently affected by the pandemic. I remember writing about this back in mid-April and wanted to check and see if some of my prognostications were still holding up.
Here are some of the norms and routines that I listed back at the beginning of the pandemic that I thought could see permanent changes:
- Less office space needed as companies allow more employees to work from home – The advancements in video calling, internet bandwidth capacity, and security software make this decision easier for companies that have a large amount of white-collar desk jobs. This is definitely holding true. Many companies are keeping the WFH edict in place all the way through next summer. Some have even given employees the option of WFH from home a permanent solution. This will cause ramifications down the line for office space owners, parking garages, the F&B industry that cater to these workers, public transportation, office cleaning services, office security companies, dry cleaners, utilities, and fuel companies. It will benefit most technology firms, especially software and video conferencing firms. Home improvement companies will see increased revenues as well.
- Less business travel, more virtual conferences and meetings – For the same reasons above and also the fear of catching the disease, many will opt to hold meetings and attend conferences virtually. This is decimating the travel industry: airlines, hotels, and rental cars are getting hit the worst. Technology services will be the beneficiaries.
- More tele-medicine – Most doctor visits will still be in person, but we will find ourselves having many routine doctor consults being completed online or via conference call. My PCP has gone back to in-person visits but many are keeping tele-health visits in place for patients. The biggest beneficiary of this trend is, once again, technology firms, such as video conferencing and security software companies.
- More homeschooling, online college courses – Similar reasons as above and could save a lot of money, especially for college kids. Most school systems now have the dual option of in-person or virtual classroom learning from elementary up through college. Less school employees needed for cleaning, security, meal service, etc. Beneficiaries? You guessed it, technology firms.
- More streaming, less going to movie theaters – At least for our more senior population. Since April, many theaters have closed, including all of Regal Cinemas’ theaters. Being in enclosed spaces for long periods of time is not a good way to minimize your exposure to covid so this comes as no surprise. Devastating for outside-the-home-entertainment but for internet service providers, cable companies, content providers, and online streaming services, it is a boon.
- Less physical grocery shopping – I started doing curbside pickup of my groceries recently and it is very convenient and reduces your chances of contracting the disease. Plus, many stores also offer home delivery. I would think this would be neutral as far as revenue for grocery stores, whether they outsource the delivery service or not. It would be beneficial for delivery service companies like Instacart and Shipt.
The common theme to take away from this is that technology firms are going to be the big beneficiaries of this covid pandemic. Most of the above was probably going to happen eventually. The pandemic just accelerated the timelines.
Stay safe and let me know if you have any questions.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
