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US businesses have more physical locations now than pre-pandemic

A Navistar International autonomous-capable truck model, center, sits in the warehouse at TuSimple in Tucson, Arizona U.S.
Reuters/Rebecca Noble
Trucking ahead.
  • Nate DiCamillo
By Nate DiCamillo

Economics reporter based in New York.


US businesses now have more physical locations than before covid-19, another sign of the blistering pace of the economic recovery.

Companies shut down offices, stores, and warehouses across the country in the first year of the pandemic. But by the third quarter 2021, the number of physical locations had bounced up 7% above what it was two years prior, pre-covid, according to an analysis by the Economic Innovation Group (EIG), a Washington think tank.

That’s a much faster recovery than after the Great Financial Crisis. Post-2008, it took five years for 44% of US counties to return to the number of physical locations they had before the crisis. This time around, 74% of US counties recovered the level of business establishments they had prior to covid-19 in under two years.

“In fact, the share of counties actively shedding business establishments fell over the last two years compared with the prior, pre-pandemic, two-year window,” wrote Connor O’Brien, a research and policy associate at EIG.

Part of the reason why companies have bounced back more quickly from the pandemic is the federal government’s much bigger stimulus package, which helped keep businesses afloat. The jump in physical locations also reflects pandemic-related spikes in demand for certain services. The number of establishments related to freight trucking, for example, rose 19% as consumers turned towards online orders during the pandemic.

Services industries led the way

The increase in physical locations was led by the services industry, even though US consumers spent more on goods than services during the pandemic. While retail and restaurants were badly hit from covid-19 restrictions, activity in information, professional, and social services picked up. This included computer programming, administrative and management consulting, and computer design. Research and development in biotechnology, nanotechnology, and physical sciences each grew by more than 20%.

In contrast, home services services including cooks, gardeners, and home cleaning declined. Home and car repairs, dry cleaners, and nail and hair salons also suffered.

Whether these trends continue going forward will depend on work-from-home dynamics, supply chain snags, and labor supply O’Brien wrote. “For now, the economic effects of the pandemic and its aftermath continue to substantially alter the landscape of American business growth,” he said.

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