Gary Shilling's Guide to the Post-Pandemic Economy, Part 2
I explored the first four of 12 lasting effects of the Covid-19 pandemic on the economy and financial markets in my previous column. Here are four more: greater use of telecommunications, a shift in preferred residences, more employee independence and an increased emphasis on online shopping.
Greater use of extant telecommunications has been forced by the pandemic, which has also encouraged the development of new technology. Zoom calls have replaced many in-person, face-to-face meetings and taught us that personal encounters aren’t always needed in business and personal relationships. Zoom Video Communications Inc.’s stock is well down from its highs a year ago, but is still three-and-a-half times where it was in January 2020, just before the virus closed the economy.
Previously, I visited many clients, even if it was just to show that I cared about them and appreciated their business. After a year-and-a-half or more absence from offices, many clients don’t see that necessity of in-person meetings. Remote meetings tend to be shorter and more efficient than physical encounters, even without considering the travel time saved. These changes will persist long after Covid-19 and its derivatives are conquered. This is good news for telecommunications equipment and services providers. And it will probably be a negative for airlines, hotels and others servicing business travelers.
Many people abandoned expensive city living for spacious single-family homes in the suburbs and smaller cities to escape the virus, and to spend more time with families and less time commuting. According to the Census Bureau, average commuting time rose 10.4% from 25 minutes in 2006 to 27.6 minutes in 2019. The further away from major cities, the greater the rise in home values over the last two years.