NATIONAL COVID-19 IMPACT AND RECOVERY

The ripple effects of COVID-19 across the world economy will continue to be felt for years. Although, COVID-19 has created challenges and opportunities both new and unique for residents, local governments, and the private sector, including:

• According to the Federal Reserve, the supply of US dollars in circulation (M2 definition) accelerated by more than 25 percent in 2020, the fastest year-over-year rate of growth in the money supply going back to the 1940s, through three rounds of stimulus funding beginning with the CARES Act and ending with the American Rescue Plan Act.

• While trends toward remote working have been emerging since 2010, COVID-19 instantly expanded the share of employees across a host of sectors (including software) who could work remotely. At the same time, this shift also reinforced clear limits of broadband infrastructure, particularly in rural areas.

• As COVID-19-linked lockdowns unfolded in the spring of 2020, sectors such as banking & financial services initially set aside large reserves to prepare for growth in bad loans in real estate. Although conditions began to improve by the spring of 2021, growth in e-commerce has jumpstarted U.S. demand for mobile payment systems, with potential for profound transformation within banking and finance in coming years.

The National Alliance of Community Economic Development Associations

(NACEDA) partnered with the Federal Reserve System’s community development function and other national partners to conduct a survey measuring the effects of COVID-19 on low- to moderate-income people, communities, and the entities serving them. Please see the full report for a summary of all the findings.

• This survey provides information on how the COVID-19 pandemic affected businesses and communities, citing the pandemic as significantly disruptive for businesses who serve low- to moderateincome communities and challenging for those with small businesses and having services for children.

• Many of the respondents in the survey said that in all the categories listed (financial stability, small business, access to health care, services for children, housing stability, and basic consumer needs), it may only take one to three years for their communities to return to pre-pandemic conditions, with very little suspecting it will happen in under a year. However, there is uncertainty in the total impact the pandemic has had on communities, and some respondents feel like their communities may never return to prepandemic conditions or are simply unsure how their community will bounce back and the time it would take.

• One of the most notable challenges for people within the pandemic was returning to work. Access to childcare, public transportation, and COVID-19 exposure risks affected communities across the nation.

• The pandemic has negatively impacted the financial health of over 50 percent of the entities that respondents represented according to the information gathered within this survey. Complimentary to this data, nearly 60 percent of those who answered: “negative impact to financial health” noted that if the current conditions continue, their business would experience financial distress. This would result in the reduction of services offered or were able to provide, laying off staff, closing various business locations, or shutting down their business entirely.

• Many of the respondents noted they are a direct service provider which means they provide aid for older adults, youth, and those with disabilities. Decreasing their services or losing their business entirely would be detrimental to several individuals.