How’s Recovery? It Depends on Where You Live

What does the rate of post-pandemic growth look like? It might depend on who you ask. More to the point, it might depend on where that person lives. 

As PYMNTS and Melio learned in their December Main Street Index (MSI) report, growth paths in the wake of COVID-19 seem to vary region to region, with pandemic-related employment patterns and regional regulatory changes causing varying degrees of impact on small businesses.

For example, the Mountain region showed a larger increase in year-over-year MSI scores, which looks at things like wage growth, employment and new business openings, while the Southwest stayed the top performer. 

The Northeast, meanwhile, showed the steepest decline the first quarter of the pandemic, a 15% drop, while the Southwest fell the least, just 7%.  

Growth in the Mountain region is expected to overtake any other region for the year, in part because of wage differences. Small business employers in that part of the country pay higher wages than their southern counterparts, for example. 

The Disposable Income Question 

Disposable income levels can affect recovery as well. For example, nearly 60% of people in the South Central part of the country live paycheck to paycheck, in a place where wages trail other sections of the country.

In the Northeast, 56% of adults live paycheck to paycheck while also dealing with a higher cost of living. These findings could have impacted these regions’ MSI performance for the year, as business owners struggled to drive sales in a time of waning disposable income. 

The Industry Difference 

Just as recovery has varied from region to region, it’s also differed from business sector to business sector. 

As the report found, half of the country’s core MSI business sectors have yet to return to their pre-pandemic levels. The professional services sector is projected to grow 6.7% compared to the third quarter of last year, and both eating and drinking places (6.6%) and fitness centers (6.1%) continue to recover from the pandemic’s low point. These types of businesses are only at 20% of the level where they were two years ago. 

To learn more about what life on Main Street looks like in the wake of COVID-19, download your free copy of The Main Street Index.