While the Boston Metro is experiencing business disruptions from COVID-19, our local economy may endure the downturn better than most. Here are key highlights from the Boston Federal Reserve’s Beige Book Report from April 2020, along with our own insights.
Most manufacturing firms in our region reported higher sales during the first quarter of 2020. Boston’s diversity of manufacturing includes food products, medical supplies, packaging companies and consumer goods. These industries are well-positioned at the moment. However, some producers experienced significant sales declines as a result of retail closures.
The hospitality sector is suffering from widespread cancellations. Once social distancing protocols are eased, it may take several months for pent-up demand to surface. Coastal areas that are typically visited by regional residents, who travel by car, could be among the first to recover.
Information Technology firms saw a robust first quarter, but momentum slowed sharply during March. I/T companies have been weathering the slump with reasonable confidence, though new business has stalled.
During the first quarter, commercial real estate in the Boston Metro had positive activity in the office and industrial sectors, evidenced by low vacancies and rising rents. The momentum halted in March as lease activity slowed and credit markets became skittish. A bright spot is the demand for warehouse space, which surged with rising e-commerce activity.
Overall, respondents to the Federal Reserve survey expressed optimism for the future. Second-quarter disruptions may be likely in varying degrees, but so far, long-term plans remain intact.
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