US Industries Being Devastated by the Coronavirus
As the coronavirus devastates the U.S. economy, companies will likely have to pull back on expansion, leaving a huge gap in the construction industry. Housing starts dropped to 1.2 million in March from 1.6 million in February, a more than 22% decline. The drop was larger than the expected drop to 1.3 million starts.
Smaller construction companies may have to lay off workers as their supply of equipment and parts from China is disrupted. An estimated 7.6 million Americans are working in the construction sector and could be affected by these changes.
With Americans working from home and staying in instead of going to work and visiting bars and restaurants, ride sharing companies like Uber and Lyft are seeing their potential ridership dissipate. According to a Business Insider survey Uber and Lyft drivers said their earnings dropped by 50%-80% throughout March, if they were even still driving at all. Many stopped offering rides over safety concerns.
Both companies announced they would stop letting different users share the same car. Uber has pledged financial assistance to drivers who are quarantined and not able to work, though this would likely not impact most of the estimated 900,000 U.S. drivers. Nearly 5,000 Americans in the transportation and warehousing sector lost their jobs in March, making it one of the most impacted industries in that regard.
With nearly every state instituting stay-at-home orders, Americans are largely unable to go out and find and buy a new home. The impact of COVID-19 on real estate varies widely between major areas. In New York City, one of the hardest hit areas, new home listings fell around 70%. The real estate industry as a whole is suffering, with weekly mortgage applications falling by nearly 18% in April’s first week, compared to the previous week, indicating less house sales transactions.
The impact could stretch for months after social distancing guidelines are lifted as there could be fewer houses available. The number of housing starts fell from 1.56 million in February to 1.2 million in March, though this may be more in line with an anticipated decrease in demand. With 22 million Americans filing for unemployment between March 14 and April 11 and many more facing reduced earnings, there will likely be fewer Americans in the market for a new house.
While some hospitals in coronavirus hot spots like Queens, New York, have been stretched to their limits by an influx of patients, other hospitals are struggling — especially those in rural areas. As facilities have had to suspend nonemergency treatment, their revenue has greatly declined. Becker’s Hospital Review found that well over 100 American hospitals had to furlough or lay off workers, costing thousands of health care workers their income. This applies to doctors offices, dental offices, physical therapy, yearly physicals, preventive care and more.
Other health care-related facilities have seen sharp declines in business, as well. Quest Diagnostics performed hundreds of thousands of COVID-19 tests, nearly 40% of all coronavirus testing by commercial labs. The demand for its other services, however, declined significantly, and the company furloughed over 4,000 employees due to the lost business.
Mills that would normally produce millions of tons of steel have been shut down across America due to the coronavirus. Companies like U.S. Steel, ArcelorMittal, and Gerdau have idled their operations due to a lack of demand, largely from automakers that are no longer manufacturing vehicles. Credit Suisse predicts that the auto industry’s demand for steel will decline 70%-90% in the second quarter of 2020.
Steel mills were allowed to continue operations as an essential industry. More than 83,000 Americans work in these mills.