While parts of the economy have experienced a recovery that restored them to pre-pandemic levels, not every sector is out of the woods quite yet.
The fitness, retail and restaurant industries are still feeling the impact of ongoing social distancing practices, according to PYMNTS’ Main Street Index, which we measure based on growth in new establishments, real wages and employment.
According to our research, fitness establishments’ scores on the index are 3.4% lower than they were before the pandemic, the furthest away from the pre-pandemic scores of the three. Meanwhile, the retail and restaurant sectors are a respective 1.8% and 1.3% below their pre-COVID scores. By way of comparison, the score for building contractors/remodelers is 16% above its last pre-pandemic reading.
The pandemic also highlighted preexisting differences in the growth rates of several crucial Main Street sectors. Some, like restaurants and retail, are still below levels from a decade ago, while others — professional services and healthcare — have sailed above past benchmarks.
The professional services sector remains the least affected by COVID. During the first quarter of this year, the sub-Index score for professional services hits a high of 160.7, which indicates a growth of 46% over the past 10 years.
Building contractors/remodelers have performed best in the last two years, with this sector reporting the greatest wage and income growth. Personal services, fitness, and building contractors/remodelers have better prospects for Q1 2022 compared to the first quarter of last year, reporting a 2022 CAGRs of 20%, 10%, and 9.4%, respectively.
Year-over-year increases show that certain segments have continued to rebound from their lowest point during the pandemic: Restaurants saw 29% growth and fitness services saw 25% growth, meaning these sectors had the highest growth last year.
Meanwhile, our research has found signs that a full economic recovery is not entirely certain. For example, wages have fluctuated since the beginning of the pandemic but have risen more than 9% above their Q4 2019 levels. Employment among Main Street small and medium-sized businesses (SMBs) still trails, however, rising only 4.5% compared to the fourth quarter of 2019.
PYMNTS research finds that 64% of Main Street SMB owners expect to see solid sales growth this year, but they are concerned about inflation and economic uncertainty. While 54% of Main Street SMB owners say that inflation endangers their sales forecasts, half of them say that economic uncertainty could harm their performance this year.
For more of our research, download the latest version of The Main Street Index, a collaboration between PYMNTS and Melio.