As expected, retail, hospitality and restaurants account for half of the job losses in Orange County unemployment since the beginning of the pandemic, according to a new report from JLL. An amalgam of industries make up the other half of job losses in Orange County, including medical, aerospace and entertainment, which account for nearly a quarter of job losses.
"During economic downturns we quickly realized how strongly connected sectors are to each other," Jared Dienstag, research manager at JLL, tells GlobeSt.com. "In addition to retail, restaurants and hospitality, there are explanations for the layoffs from the other industries. For the medical layoffs, nearly 90% are dental related, which makes sense since dental offices were closed with the exception of emergencies, however, dental offices are in the early stages of reopening. Aerospace has experienced layoffs because air travel came to a halt so the demand for aerospace parts and services has diminished. The leisure and entertainment sector was hit hard with movie theaters, community centers, and performance venues closing down. While movie theaters are set to reopen at 25% capacity, larger entertainment locations remain closed."
Manufacturing, life science and the auto industry also contributed to the job losses in the market. "While the COVID-19 outbreak brought increased demand for essential items, it simultaneously brought decreased demand for non-essential products, which has caused layoffs in the manufacturing sector," he says. "Almost all of the life science layoffs come from dental device firms, so without the demand from dentists these firms have experienced cutbacks. Because car sales dipped so much, the automotive industry recorded layoffs with people holding back on big-ticket purchases."
While Orange County has seen significant layoffs, the report expects that a many will return once the stay-at-home orders are lifted and we enter a recovery. So far, less that 1% of the layoffs have been the result of permanently business closures and 90% of the layoffs are considered temporary. "With many businesses starting to reopen, the employment situation has already begun to show signs of improvement, albeit, slight improvement," says Dienstag. "Returning to work could change based on how long it takes conditions surrounding COVID-19 to improve. If COVID-19 cases continue to rise which means businesses are unable to open up at full capacity, then there will be fewer opportunities for people to return to their jobs."
Job recovery is good news for the local economy; however, the economic rebound will rely on more than just jobs. "While the reopening of businesses is a key part to recovery since that will get people back to work, it is not the only part," says Dienstag. "The full swing of economic recovery should happen when most people feel safe to be out in crowds, such as dining at restaurants, shopping at retail stores, travelling, and other activities everyone did prior to COVID-19. Of course, the development of a vaccine is the best way to accomplish this, but even getting to the point where the number of new COVID-19 cases declines would be a big help."
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Kelsi Maree Borland
