As the U.S. works to recover from the COVID-19 pandemic and the corresponding economic dislocation, some industries will naturally rebound quickly as distancing measures lighten, according to a new report from BMO Economics.
In the report, titled “America’s Post-Pandemic Economic Prospects,” BMO’s economists identify sectors which are likely to rebound and grow strongly in the new environment, along with others that may lag and have difficulty returning to original levels.
“While there are serious challenges ahead for the economy, there are also important reasons to remain positive,” said Doug Porter, Chief Economist, BMO Financial Group. “While some sectors will face persistent challenges as a result of the shutdowns and distancing measures, at the same time – in classic creative destruction fashion – there will be some sectors that strengthen and step into the gap.
“The main conclusion is that economies are resilient, and people and businesses can be incredibly resourceful in the face of challenges; don’t underestimate the ability to recover from this tough period,” concluded Porter.
“Our business customers are adapting to the challenging times, in some cases even transforming their operations to help their local community, all while still working tirelessly to keep their operations moving forward,” said David Casper, U.S. Chief Executive Officer, BMO Financial Group. “Their optimism and their entrepreneurial spirit are critical in leading our economy to better days.”
“The recovery from the 2020 recession can be seen as a slow stair climb up after a fast elevator ride down,” according to Michael Gregory, Deputy Chief Economist and Head, U.S. Economics, BMO Capital Markets. “These ‘stairs’ are fabricated from the various factors delaying full recovery for some businesses and industries, while denying it altogether for others. However, helping us up these stairs are the massive amounts of fiscal and monetary policy support.”
The report identifies industries that are expected to meaningfully outperform in a post-pandemic world, including:
- Health care and social assistance
- Information and cultural industries
- Food and beverage stores
- Warehousing and storage
Industries expected to significantly lag behind include:
- Air transportation
- Accommodation and food services
- Arts, entertainment and recreation
- Mining (including oil and gas extraction)
The full report can be found at https://capitalmarkets.bmo.com/en/news-insights/covid-19-insights/research-strategy/americas-post-pandemic-prospects/
BMO subject matter experts have been constantly monitoring the developments around COVID-19, delivering insights to help make sense of what this means for businesses and the economy. Continue to follow us by visiting bmocm.com/covid-19-insights for more up-to-the-minute information. Subscribe to BMO COVID-19 Insights for a podcast of select reports, conference calls and thought leadership.
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of $987 billion as of April 30, 2020, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.
SOURCE BMO Financial Group