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Pandemic Recovery: Have North American Downtowns Bounced Back?

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Pandemic Recovery: Have Downtowns Bounced Back?

As we continue on our journey towards recovery from the impacts of the pandemic, North American offices that sat empty for months have started to welcome back in-person workers.

This small step towards normalcy has sparked questions around the future of office life—will office culture eventually bounce back to pre-pandemic levels, or is remote work here to stay?

It’s impossible to predict the future, but one way to gauge the current state of office life is by looking at foot traffic across city centers in North America. This graphic measures just that, using data from Avison Young.

Change in Downtown Office Traffic

According to the data, which measures foot traffic in major office buildings in 23 different metropolitan hubs across North America, remains drastically below pre-pandemic levels.

Across all major cities included in the index, average weekday visitor volume has fallen by 73.7% since the early months of 2020. Here’s a look at each individual city’s change in foot traffic, from March 2, 2020 to Oct 11, 2021:

CityCountryChange in Foot Traffic
Austin🇺🇸-51.70%
Calgary🇨🇦-54.50%
Boston🇺🇸-54.90%
New York🇺🇸-60.50%
San Francisco🇺🇸-60.80%
Edmonton🇨🇦-62.20%
Houston🇺🇸-67.90%
Chicago🇺🇸-68.10%
Vancouver🇨🇦-68.20%
Los Angeles🇺🇸-68.60%
Philadelphia🇺🇸-69.00%
Washington, DC🇺🇸-69.40%
San Francisco Peninsula🇺🇸-70.00%
Denver🇺🇸-73.50%
Nashville🇺🇸-75.60%
East Bay/Oakland🇺🇸-76.10%
Atlanta🇺🇸-77.50%
Dallas🇺🇸-79.80%
Montreal🇨🇦-80.30%
Toronto🇨🇦-81.20%
Miami🇺🇸-82.20%
Silicon Valley🇺🇸-82.60%
Ottawa🇨🇦-87.70%

The Canadian city of Calgary is a somewhat unique case. On one hand, foot traffic has bounced back stronger than many other downtowns across North America. On the other hand, the city has one of the highest commercial vacancy rates in North America, and there are existential questions about what comes next for the city.

Interestingly, a number of cities with a high proportion of tech jobs, such as Austin, Boston, and San Francisco bounced back the strongest post-pandemic. Of course, there is one noteworthy exception to that rule.

A Tale of Two Cities

Silicon Valley has experienced one of the most significant drops in foot traffic, at -82.6%. Tech as an industry has seen one of the largest increases in remote work, as Bay Area workers look to escape high commuter traffic and high living expenses. A recent survey found that 53% of tech workers in the region said they are considering moving, with housing costs being the primary reason most respondents cited.

Meanwhile, in a very different part of North America, another city is experienced a sluggish rebound in foot traffic, but for very different reasons. Ottawa, Canada’s capital, is facing empty streets and struggling small businesses that rely on the droves of government workers that used to commute to downtown offices. Unlike Silicon Valley, where tech workers are taking advantage of flexible work options, many federal workers in Ottawa are still working from home without a clear plan on returning to the workplace.

It’s also worth noting that these two cities are home to a lot of single-occupant office buildings, which is a focus of this data set.

Some Businesses Remain Hopeful

Despite a slow return to office life, some employers are snapping up commercial office space in preparation for a potential mass return to the office.

Back in March 2021, Google announced it was planning to spend over $7 billion on U.S. office space and data centers. The tech giant held true to its promise—in September, Google purchased a Manhattan commercial building for $2.1 billion.

Other tech companies like Alphabet and Facebook have also been growing their office spaces throughout the pandemic. In August 2021, Amazon leased new office space in six major U.S. cities, and in September 2020, Facebook bought a 400,000 square foot complex in Bellevue, Washington.

Will More Employees Return or Stay Remote?

It’s important to note that we’re still in the midst of pandemic recovery, which means the jury’s still out on what our post-pandemic world will look like.

Will different cities and industries eventually recover in different ways, or are we approaching the realities of “new normal” foot traffic in North American city centers?

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Politics

The Start of De-Dollarization: China’s Gradual Move Away from the USD

The de-dollarization of China’s trade settlements has begun. What patterns do we see in USD and RMB use within China and globally?

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An area chart illustrating the de-dollarization of China’s trade settlements.

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The following content is sponsored by The Hinrich Foundation

The Start of De-Dollarization: China’s Move Away from the USD

Since 2010, the majority of China’s cross-border payments, like those of many countries, have been settled in U.S. dollars (USD). As of the first quarter of 2023, that’s no longer the case.

This graphic from the Hinrich Foundation, the second in a three-part series covering the future of trade, provides visual context to the growing use of the Chinese renminbi (RMB) in payments both domestically and globally.  

The De-Dollarization of China’s Cross-Border Transactions

This analysis uses Bloomberg data on the share of China’s payments and receipts in RMB, USD, and other currencies from 2010 to 2024. 

In the first few months of 2010, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. 

China has since closed that gap. In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.

DateRenminbiU.S. DollarOther
March 20100.3%84.3%15.4%
March 20114.8%81.3%13.9%
March 201211.5%77.1%11.5%
March 201318.1%72.7%9.2%
March 201426.6%64.8%8.6%
March 201529.0%61.9%9.0%
March 201623.6%66.7%9.7%
March 201717.6%72.5%9.9%
March 201823.2%67.4%9.4%
March 201926.2%65.1%8.7%
March 202039.3%54.4%6.3%
March 202141.7%52.6%5.6%
March 202242.1%53.3%4.7%
March 202348.4%46.7%4.9%
March 202452.9%42.8%4.3%

Source: Bloomberg (2024)

Since then, the de-dollarization in Chinese international settlements has continued.  

As of March 2024, over half (52.9%) of Chinese payments were settled in RMB while 42.8% were settled in USD. This is double the share from five years previous. According to Goldman Sachs, foreigners’ increased willingness to trade assets denominated in RMB significantly contributed to de-dollarization in favor of China’s currency. Also, early last year, Brazil and Argentina announced that they would begin allowing trade settlements in RMB. 

Most Popular Currencies in Foreign Exchange (FX) Transactions

Globally, analysis from the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.

Currency20132022Change (pp)
U.S. Dollar87.0%88.5%+1.5
Euro33.4%30.5%-2.9
Yen23.0%16.7%-6.3
Pound Sterling11.8%12.9%+1.1
Renminbi2.2%7.0%+4.8
Other42.6%44.4%+1.8
Total200.0%200.0%

Source: BIS Triennial Central Bank Survey (2022). Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.

The Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use. 

The Future of De-Dollarization

If the RMB’s global rise continues, the stranglehold of the USD on international trade could diminish over time.  

The impacts of declining dollar dominance are complex and uncertain, but they could range from the underperformance of U.S. financial assets to diminished power of Western sanctions.

However, though the prevalence of RMB in international payments could rise, a complete de-dollarization of the world economy in the near- or medium-term is unlikely. China’s strict capital controls that limit the availability of RMB outside the country, and the nation’s sputtering economic growth, are key reasons contributing to this.

The third piece in this series will explore Russia’s shifting trading patterns following its invasion of Ukraine.

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Visit the Hinrich Foundation to learn more about the future of geopolitical trade

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