The Federal Reserve Bank of New York reports a continuing surge in business activity in the metro New York, northern New Jersey and southwest Connecticut region as the recovery from the pandemic shutdown moves into high gear.
The NY Fed based that analysis on responses to its monthly Business Leaders Survey that were received June 2-9.
The NY Fed concluded that business activity grew at its fastest pace on record in the region”™s service sector. Fifty-five percent of companies responding said that conditions have improved while 12% described business conditions as rising at “a solid clip.”
Employment was identified as a weak link in the chain, even though employment has been steadily increasing as the pandemic and government-imposed restrictions on business activity have eased.
The Fed said that businesses in the region reported that current employment generally remains well below pre-pandemic levels. On average, employment was down 8% among service firms and 9% among manufacturers. On average, service firms said they would employ 7% more workers and manufacturers said they would employ about 9% more than current levels, which would bring employment back in line with pre-pandemic levels.
The bank suggested that a reason for at least some of the some of the soft employment numbers may be that companies are having difficulty finding workers.
Survey responses indicate that remote working is expected to remain more common after the pandemic.
Before the pandemic, an average of about 10% of workers in the service sector worked remotely for four days a week. Now, service firms report that about 40% of employees work remotely for a little more than four days per week. Service firms reported they expect about 25% of the workforce will be remote once the pandemic dust settles.
In the manufacturing sector, while about 5% of employees worked remotely before the pandemic, and 10% worked remotely during the pandemic, it will settle back to about 6% after the pandemic, according to data received by the NY Fed.
More than 40% of service firms and more than 70% of manufacturers reported that their workers had already returned in full. Another 20% of service firms expected to have their workers fully back on site between June and August, with an additional 21% expecting that to happen during September.
About 12% of the respondents said workers are not expected to return in full until 2022. Roughly 8% of manufacturers said they expect their on-site workers to return over the summer and another 8% expected them to return in September. About 10% of the manufacturers said workers are not expected to return until 2022.
