Last month we spoke to CAIT-affiliated researcher Dr. James Hughes to discuss COVID-19 and its potential impacts on the economy and regional transportation. Now we check back with him again for new insights as the situation progresses.
The impact of COVID-19, might bring with it a number of future structural changes to the way people commute, work, and socialize. Photo ©U.S. Department of State.
As the region, country, and world continues to deal with the effects of the Coronavirus, some early metrics are beginning to shine a light on the economic impacts of COVID-19.
“We have been operating essentiality in statistical darkness,” said Dr. James W. Hughes, a university professor and dean emeritus of Rutgers’ Edward J. Bloustein School of Planning and Public Policy and affiliated researcher at the Center for Advanced Infrastructure and Transportation (CAIT). “We know things are bad, but as key metrics begin to come in it will provide a more precise understanding of the economic impact.”
For example, the first quarter 2020 Gross Domestic Product (GDP) estimates were released at the end of April by the Bureau of Economic Analysis, he said. It reported a 4.8% decline.
Preliminary GDP estimates usually come out one month after the quarter ends, but in May there will be revisions followed by the final results in June—and it is safe to expect some substantial negative revisions, Dr. Hughes explained. For the second quarter, where more of the impact will be seen, results will not be released until the end of July.
“We expect to see a series of unprecedented numbers, which is not surprising as there has never before been a forced shutdown of the economy,” he said.
One trend among economists now is to go analyze the Great Recession of 2007-2009 and look at the preliminary estimates and how they were later revised to represent the true economic impact.
In terms of transportation recovering from the economic shutdown, Dr. Hughes said that the majority of funding so far has focused on health. The next round of finance programs are expected to provide more in terms of state and local aid—such as higher education and public transportation among other programs.
USA Today recently reported that the major decline in state and local transportation funding due to the Coronavirus pandemic threatens to bring road and bridge construction to a halt for the time being. Officials said there is a projected 30% decline in transportation revenue nationwide.
“I think what is needed most for public transportation agencies is getting large amounts of money to make up for lost revenue, and that isn’t here yet,” Dr. Hughes said. “Another critical roadblock to keep in mind is the timing that these projects take to get approved and money disbursed.”
While we wait to learn more on that end, another important question is what structural changes might come about as a result of people’s changed transportation, work, and social behaviors after going through COVID-19 and related safety measures and limitations.
Traffic Flows and Telecommuting
One question is how will traffic flows and commuting patterns be altered?
Dr. Hughes said that working from home and telecommuting is a trend that has become more popular in recent years, but so many companies being forced to adapt to the practice might accelerate that trend in the future.
Additionally, many of the job growth centers in the Northeast, such as downtown Boston, MA; Cambridge, MA; New York City; and the Hudson River Waterfront among others are in densely-populated areas with close quarters and heavy transportation patterns. Dr. Hughes said people and companies might have to rethink this.
“At the same time we’ve had an extraordinarily soft, struggling suburban office market,” he said. “Companies might be inspired to create more suburban satellite offices due to safety concerns in the future.”
If changes like these were to take place it would have a significant impact on traffic patterns and commuting patterns.
Comfort Levels on Mass Transit and Shared Social Spaces
Another question is how comfortable will people be in public spaces, such as riding the train or going shopping at a mall once restrictions are eased?
Dr. Hughes said that people might feel more comfortable in their own cars rather than being close to others for a while. Additionally, an added emphasis on cleanliness could add new operational challenges and expenses to transportation agencies in maintaining their assets.
“After 9/11 we saw a massive increase in security at airports but also many office buildings,” he said. “It is possible that new and increased cleaning and sanitation measures for public spaces and services might be an unexpected outcome of the Coronavirus.”
Recently, the normally 24/7 New York City subway system shut down entirely overnight for virus-related disinfecting and cleaning, according to CBS News. Service was reduced in March due to the virus, but is now being stopped from 1 a.m. to 5 a.m. every day, and this marks the first time in 115 years that the subway system has not been round-the-clock outside of emergency situations.
Transportation issues within buildings may also have to be addressed Dr. Hughes said. How will social distancing be maintained in elevators? Will elevator “monitors” be needed to enforce strict density regulations? Will self-cleaning elevator buttons need be installed?
These longer-term, potential structural changes will not be seen until the economy opens up again and people adapt back to “normalcy.”
“As the situation progresses it is important to monitor policy and lifestyle changes and discussions, Dr. Hughes said. But, a lot of these impacts are still up in the air and it is too early to predict exactly what changes will occur or what specific negative economic impact the virus will have.”
