Diversity of industry helps Missouri rebound from pandemic downturn

(The Center Square) – A diverse industry has helped Missouri rebound from the economic downturn caused by the COVID-19 pandemic, and growth is hoped for as more people get vaccinated, a state researcher said.

“I think a lot of people, including us here in Missouri, thought things were going to perhaps be worse. And we were pleasantly surprised that the recovery was as robust as it was,” Jeff Pinkerton, director of research for the Missouri Department of Economic Development, said.

The state looks at employment change, and like the rest of the country in March and April of last year, the state was in the throes of losing a lot of jobs, Pinkerton said. The state lost about 300,000 jobs a month.

“We rebounded very, very quickly ever since then. We’ve recovered about 63% of those jobs. So that’s outpacing the nation in terms of employment recovery from the big losses we suffered in March and April, I think,” Pinkerton said.

The first round of economic stimulus last summer was very helpful to keep people whole and buying. People buying cars and houses kept the overall economy going.

“I think the overall tenor is back a year ago we were really worried. And I think just about anyone would be pleased with where we ended up a year later, looking back on things,” Pinkerton said.

The state’s gross domestic product (GDP) growth was eleventh in the nation for the fourth quarter of 2020, he said.

“But I think the state really when you think about it, it’s a pretty diverse state economically,” Pinkerton said.

Some areas may be struggling. Pinkerton said the state is not Florida, Nevada or California, but it has a pretty large tourism industry and that sector is struggling in Missouri like everywhere else.

“We have some hopes for it to rebound over the summer as people get vaccinated,” Pinkerton said.

Pinkerton said that Missouri’s aerospace manufacturing facilities in St. Louis with Boeing may not be as prone to economic ups and downs since its client is the military. Other industries of economic diversity like agriculture and food processing are helping Missouri.

“Food processing, has a big part here, obvious with our agricultural background. We still need to eat so that industry tends to be fairly robust,” he said.

Surprisingly, Pinkerton said, the two auto assembly plants did well as auto purchases rose during COVID-19, with the demand for vehicles remaining high.

”Overall diversity in our industry mix I think really helps. So even if we’re struggling on one end, no one industry dominates so much that it’s going to really maybe drag the whole state down,” Pinkerton said.

Like much of the rest of the country, the state had a construction boom as the demand for housing is high across the country.

More people are working from home and more people are doing their workouts from home.

“They’re entertaining themselves from home, and they needed more home,” he said.

Missouri had more housing permits in 2020 than it did in 2019 despite COVID-19, which he said wasn’t necessarily unique, but it was a strength for the state.

The state is hearing demand exists on the commercial side for warehousing space. Missouri’s central location as a transportation hub plays a role.

“Intentionally or not, do I think our diversity, our industry diversity really helped us,” he said.

It remains valid to work on a known strength to be globally competitive. We can learn that having other industries to fall back on can buoy you through a downtime, he said.

“I think that’s a key lesson for us. So, keeping economic diversity in mind as we do economic development I think is a factor worth keeping in the back of our minds as we do that,” Pinkerton said.

A downside that is not unique to Missouri is a bit of concern for small businesses that have seen revenue fall 25 to 30%. He said he thinks residents may have shifted to the big box stores to shop, bypassing the smaller businesses that they used to patronize.

“I don’t know if there’s a lesson here, but we don’t want to gloss over the impact that the COVID-19 has had on some of our small businesses,” Pinkerton said.

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