The coronavirus pandemic is affecting every corner of the U.S., but a new analysis from the Brookings Institution highlights the American cities that are likely to take the hardest hit from a coronavirus recession. These cities share a theme: They are among the country's major energy, tourism and amusement destinations.
Although New York City and Seattle are hotspots for the virus, other metropolitan areas could see greater damage to their local economy. The city that could face the largest share of job losses could be Midland, Texas, an oil boom town with 42% of its jobs located in high-risk industries, Brookings said.
Initial job losses during the fast-moving public health crisis have stemmed from restaurants and stores that have been forced to shut their doors amid "shelter-in-place" orders from local governments, as well as more consumers opting to stay at home. Yet the oil industry is also facing a massive crisis due to both a sharp decline in demand amid travel cutbacks as well as a price war between Saudi Arabia and Russia.
The slump in demand for oil has been severe and swift, with oil prices down by two-thirds this year, according to Mark Finley, fellow in energy and global oil at Rice University's Baker Institute. Demand has declined by 10%, he noted, adding that the only previous period when oil demand declined by that much was from 1979 to 1982, when the U.S. was in a recession and still coping with the 1970s oil crisis.
"What took those extraordinary circumstances to do in three years, we've done in three months," Finley said Monday in a conference call on the coronavirus's economic impact that was hosted by the National Association for Business Economists.
In trying to pinpoint the cities likely to see the greatest job losses, Brookings experts Mark Muro, Jacob Whiton and Robert Maxim based their analysis on Moody's data identifying the most vulnerable industry groups. These industries are:
- Mining and oil and gas
- Employment services
- Travel arrangements
- Leisure and hospitality
Next, they mapped those industries as a share of the local economy for each of the country's top metropolitan areas. Overall, the U.S. has more than 24 million workers in these five industries, Brookings noted.
"The most affected places are a who's who of energy towns and major resort, leisure and amusement destinations across the nation," the Brookings researchers wrote in a blog post about their findings.
If there's a silver lining, it's that some cities could weather the coronavirus recession better than others — including already-battered Rust Belt cities, as well as agricultural communities, they added. Tech-focused university towns like Provo, Utah, and San Jose, California, may also be more insulated. Even so, it's unlikely that any city will emerge unscathed from a recession.
Below are the top 15 cities facing economic disruption, ranked by their share of jobs in the most at-risk industries:
- Midland, Texas: 42.5%
- Kahului-Wailuku-Lahaina, Hawaii: 40.4%
- Atlantic City-Hammonton, New Jersey: 34.2%
- Las Vegas-Henderson-Paradise, Nevada: 33.8%
- Odessa, Texas: 33.3%
- Laredo, Texas: 29.7%
- Ocean City, New Jersey: 29.7%
- Houma-Thibodaux, Louisiana: 29.3%
- Myrtle Beach-Conway-North Myrtle Beach, South and North Carolina: 29.2%
- Flagstaff, Arizona: 27.5%
- Orlando-Kissimmee-Sanford, Florida: 27.3%
- Brunswick, Georgia: 26%
- Savannah, Georgia: 24.7%
- East Stroudsburg, Pennsylvania: 24.6%
- Gulfport-Biloxi-Pascagoula, Mississippi: 24%