ShareAs the number of coronavirus cases continues to increase, many states are undertaking measures to minimize the spread of the virus through social distancing measures. The Department of Homeland Security has banned the entry of foreign nationals from China and from European countries for 30 days starting March 131. The Center for Disease Control has advised against holding gatherings of 50 people or more nationwide. The US government has issued guidelines urging people to avoid travel, going to bars, and eating out. States like Illinois, Washington, New York, New Jersey, and Connecticut have ordered the temporary closures of restaurants, bars, entertainment, and recreation venues to prevent an increase in coronavirus cases.2
While these measures are designed to keep people safe and avoid overloading the hospital system beyond capacity, these measures have an economic cost in terms of lost revenues, especially in states where these industries comprise a larger share of their economic output and employment should there be some temporary layoffs. States need to plan to mitigate these economic impacts.
Arts, entertainment, recreation, accommodation, and food services (NAICS 71 & 72)
Nationally, gross domestic product in arts, entertainment, recreation, accommodation, and food services amounted to $860 billion in 2018, or 4.2% of the $20.6 trillion GDP in 2018.
In dollar terms, the states with the largest gross domestic product in these industry sectors are California ($130 Bn), New York ($73 Bn), Texas ($64 Bn), Florida ($63.7Bn), and Illinois ($35.9 Bn).
However, relative to the state GDP, the states with the largest share of arts, entertainment, recreation, accommodation and food services are Nevada (16.5%), Hawaii (10.2%), Vermont (6.5%), Florida, (6.1%), Tennessee (5.7%), Maine (5.5%), New Hampshire (5.2%), Colorado (5.1%), and Montana (5.1%). Vermont is more of a winter destination, so the effect of social distancing is not likely to impact Vermont if the virus is contained before the winter months.
There are 19.7 million people working in arts and entertainment and food and accommodation services nationally, or 9.8% of total employed (full-time or part-time). In terms of numbers of workers, there are in California (2.5 M), Texas (1.6 M), Florida (1.4M), New York (1.2 M), and Illinois (0.7 M).
But as a share of the state employment, the states with the highest fraction of workers in food and accommodation are Nevada (21.2%), Hawaii (15.3%), Montana (11.9%), Florida (11.6%), Vermont (11.1%), Rhode Island (11%), Wyoming (10.9%), South Carolina (10.9%), New Mexico (10.9%),and Colorado (10.8%).
Air transportation (NAICS 481)
Air transportation is also a sector that is being impacted due to the travel bans imposed by 62 countries across the United States, Canada, Latin America, Europe, Asia, and Africa. The United States has banned the entry of all foreign nationals from China and many countries in Europe (the Schengen area, the United Kingdom, and Ireland).
According to the National Travel and Tourism Office, there were 79.2 million I-94 arrivals in the United States in 2019.
In the United States, the air transportation industry contributed $134 billion or 0.6% of US economic output (GDP). However, it accounts for a larger share of the state GDP in Hawaii (3.6%), Georgia (2.0%), Nevada (1.9%), Alaska (1.8%), Colorado (1.2%), Florida (1.2%), Arizona (1.1%), Illinois (1.1%), Utah (1.1%), and New Jersey (1.0%).
As of 2017 (latest data available), there were 573,100 workers in the air transportation industry, or 1.6% of total employment (part and full-time) of 200.7 million in 2018.
The largest number of workers in the air transportation industry are in Texas (71,636), California (64,527), Florida (50,968), Georgia (44,215), Illinois (41,652), and New York (37,100).
But as a share of the state employment, the states with the highest fraction of air transportation workers are Alaska (1.6%), Hawaii (1.1%), Georgia (0.7%), Illinois (0.5%), Nevada (0.5%), and Colorado (0.5%).
Retail trade (NAICS 44-45)
The retail trade sector consists of both store (e.g., a physical place like a department store) or non-store establishments (those engaged in electronic sales or direct mailing). The effect of the coronavirus on retail trade will be mixed, with physical stores more likely to be the negative impact, while online sales will increase. Total e-commerce sales reached $601.7 billion in 2019, or 11% of total retail sales
The retail trade sector contributed $1.1 trillion to the US economy or 5.5% of US total GDP in 2018. The states with the largest retail trade industry GDP are California ($153 Bn), Texas ($99 Bn), Florida ($74 Bn), New York ($71 Bn), and Washington ($47 Bn).
However, in terms of share to state GDP, Washington has the largest retail trade sector (8.3%), then Maine (7.9%), Mississippi (7.9%), Idaho (7.8%), and Vermont (7.5%), and Florida (7.1%).
In 2018, there were 19.3 trillion in workers in retail trade, or 9.6% of the 200.7 million full and part-time employed in the United States.
As a share to state employment, the states with the highest fraction of retail trade workers are New Hampshire (12.6%), Maine (11.7%), West Virginia (11.3%), Montana (11%), and South Dakota (11%).
Real estate rental and leasing (NAICS 531 and 532)
The real estate and rental and leasing includes establishments engaged in managing real estate for others, selling, renting, and/or buying real estate for others, and appraising real estate (NAICS 531). It also includes establishments leasing equipment (motor vehicles, computer goods) and lessors of non-financial intangible assets (532).
According to NAR’s commercial flash survey conducted March 11-12, 2020, 14% of respondents reported a decrease in new leasing activity and 15% reported a decrease in clients purchasing real estate.
In 2018, the gross value added in real estate, rental, and leasing in the United States totaled $2.73 trillion, or 13.3% of U.S. GDP. In dollar value, five states accounted for 43% of real estate rental and leasing: California ($503 Bn), New York ($238 Bn), Texas ($175 Bn), Florida ($172 Bn), and Illinois ($109 Bn).
Relative to the state’s output, the states with a higher fraction of real estate to the state economy are Hawaii (20.1%), California (16.8%), Maryland (16.7%), Florida (16.6%), Oregon (16.2%), New Jersey (16.1%), Arizona (15.6%), and Nevada (15%).
There are 1.1 million employed (part-time or full time) in real estate (NAICS 531), or 0.6% of total US employment of 200.7 million workers (full-time and part-time) in 2018. The largest number of workers in the real estate industry (NAICS 531) are California (1.12 M), Florida (739,810), Texas (700,688), and New York (681,434).
But as a share of the state employment, the states with the highest fraction of workers in real estate are Florida (6.9%), New Jersey (5.8%), Colorado (5.4%), New York (5.4%), Nevada (5.3%), Arizona (5.2%), Utah (5.2%), Wyoming (5.2%), and Montana (5.1%), and Connecticut (5%).
1 Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.
2 NPR, The Coronavirus Crisis. Illinois Governor J.B. Pritzker ordered all bars and restaurants to close from March 15 through March 30. California Gov. Gavin Newsom of California on Sunday (3/15) he called for the closure of all bars, wineries, nightclubs, and breweries and asked restaurants to cut their staff in half. Washington Governor Jay Inslee said on Sunday night (3/15) that he would order the temporary closure of restaurants, bars, entertainment, and recreation venues. The governors of New York, New Jersey, and Connecticut have agreed to close bars, restaurants, gyms and movie theaters temporarily starting at 8 pm Monday 3/16. Restaurants will be take-out and delivery only.
