Capital Perspectives: Refreshing on Covid’s economic impact

By: Chas Craig, Guest Columnist

Date: March 3, 2026

Introduction

The economic landscape has experienced significant shifts due to the Covid-19 pandemic. As we look back, it is essential to analyze the lasting impacts on office occupancy, e-commerce trends, and new business applications. This article revisits these topics, providing insights into the current state of the economy and what it may mean for the future.

Office Occupancy Trends

One of the most noticeable changes in the economic environment has been the shift in office occupancy rates. According to data from the Kastle Access Control System, average weekly office occupancy in the top 10 U.S. cities was approximately 56% as of February 2023. This figure marks a significant increase from the lows of 15% during the height of lockdowns but remains far below the pre-pandemic level of around 95% in February 2020.

In my previous analyses, I speculated that office occupancy would stabilize between 50% and 95%, leaning closer to the lower end of that range. Despite some recovery, the data suggests that office occupancy has made only gradual progress over the past three years. The current rate of 56% indicates that many companies continue to embrace remote work and flexible arrangements.

Future shifts in the job market could influence these occupancy rates. If there is a softening in the job market, employers may have more leverage to bring employees back to the office. However, a significant downturn could lead to layoffs, which would likely further decrease occupancy rates. Without a rapid increase in property conversions, such as transforming office spaces into residential units, it may take decades for office occupancy to return to pre-Covid levels.

E-commerce Retail Sales

The pandemic also had a profound impact on e-commerce retail sales. Prior to Covid-19, e-commerce sales as a percentage of total U.S. sales had been steadily increasing, reaching about 12% before the pandemic. However, during lockdowns, this figure surged to 16%. Initially, many believed that this spike represented a permanent shift in consumer behavior.

Surprisingly, after the initial surge, e-commerce sales reverted to a trend line similar to that seen before the pandemic. While the long-term trajectory remains upward, the growth rate aligns closely with pre-Covid trends. This suggests that brick-and-mortar retail, particularly in the high-end sector, may have a longer recovery period than previously anticipated.

New Business Applications

Another key indicator of economic resilience is the surge in new business applications. Data from the U.S. Census Bureau shows that business applications were already on the rise before the pandemic, with monthly applications typically ranging between 200,000 and 240,000 from 2004 to 2015. This figure increased steadily, reaching a peak of 315,267 in December 2019.

Since the summer of 2020, however, the number of new business applications has skyrocketed, regularly reaching between 400,000 and 500,000 monthly. This trend indicates a robust entrepreneurial spirit and a dynamic economy. The increase in new business formation is a positive sign, reflecting the adaptability and innovation of American entrepreneurs in the face of adversity.

Conclusion

As we reflect on the economic impact of Covid-19, it is clear that the landscape has changed significantly. Office occupancy rates have not returned to pre-pandemic levels, e-commerce trends have stabilized, and new business applications have surged. These factors will shape the future of the economy as we navigate the post-Covid world. It remains to be seen whether we will refer to this era as “post-Covid” or “post-AI,” but both will undoubtedly influence our economic trajectory for years to come.

Frequently Asked Questions

Note: The economic landscape continues to evolve, and ongoing analysis will be essential in understanding the long-term impacts of Covid-19.