Uneven Economic Impact of COVID-19 Across Industries

COVID-19's Uneven Economic Impact: Which Industries Thrived and Which Suffered?

Reese Marlowe in Business & Economy September 2025 • 4 min read.

"A sector-by-sector analysis reveals the surprising winners and losers during the pandemic, offering key insights for future economic resilience."

The COVID-19 pandemic triggered a global economic crisis, but its impact was far from uniform. While many businesses struggled with lockdowns and reduced demand, others experienced surprising growth. Understanding these disparities is crucial for developing effective strategies to navigate future economic disruptions.

A recent study examined the variability in aggregate personal income (PI) across 13 major industrial sectors in the U.S. during the pandemic. By analyzing time-series data and employing advanced statistical models, the research identified the sectors that demonstrated resilience and those that faced the most significant challenges.

This analysis offers a comprehensive view of the pandemic's economic impact, highlighting the importance of sector-specific strategies for fostering resilience and recovery. The findings provide valuable insights for policymakers, business leaders, and individuals seeking to understand the evolving economic landscape.

The Tale of Two Economies: Winners and Losers During COVID-19

Uneven Economic Impact of COVID-19 Across Industries

To assess the pandemic's impact, researchers used Autoregressive Integrated Moving Average (ARIMA) models to forecast personal income (PI) trends from 2020 Q1 to 2023 Q2, as if the pandemic had never occurred. These forecasts were then compared to actual PI data to quantify the economic effects on each sector.

The study revealed a striking contrast between sectors. Some industries demonstrated remarkable resilience, with PI quickly recovering to pre-pandemic levels and even exceeding them. Others experienced prolonged downturns, struggling to regain their footing even as the broader economy began to recover.

Resilient Sectors: Utilities, Retail, Finance, Real Estate, and Healthcare showed early signs of recovery. Farming also bounced back relatively quickly after initial setbacks.
Struggling Sectors: Accommodation and Food Services faced delayed recovery, contributing significantly to overall economic variance.
Positive Deviations: Finance and Utilities showed positive deviations, indicating lesser impact or potential benefit during the early pandemic stages.
Moderate Recovery: Manufacturing, Wholesale, and Education showed moderate recovery trends.
Lagging Sectors: Construction and Government lagged in resilience, indicating more prolonged challenges.

The aggregate economic impact, initially negative at -0.027 in 2020 Q1, plummeted to -1.42 in Q2 before improving by Q4, reflecting adaptation and resilience across sectors.

Lessons Learned and Policy Implications

This sector-specific analysis provides crucial insights for policymakers and business leaders. By understanding which industries are most vulnerable to economic shocks and which demonstrate resilience, targeted support and strategic investments can be implemented to foster a more balanced and robust economic recovery. Future research should explore the specific factors that contributed to resilience in certain sectors, providing actionable guidance for building a more resilient economy.

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This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2403.20039,

Title: Variability In Aggregate Personal Income Across Industrial Sectors During Covid-19 Shock: A Time-Series Exploration

Subject: econ.gn q-fin.ec

Authors: Didarul Islam, Mohammad Abdullah Al Faisal

Published: 29-03-2024

Everything You Need To Know

What specific sectors in the U.S. demonstrated the most resilience during the COVID-19 pandemic, and how did they fare?

Several sectors in the U.S. exhibited remarkable resilience during the pandemic. Specifically, Utilities, Retail, Finance, Real Estate, and Healthcare showed early signs of recovery. Farming also bounced back relatively quickly after initial setbacks. These sectors either experienced a lesser negative impact or potentially even benefited during the early stages of the pandemic, as indicated by positive deviations in sectors like Finance and Utilities. The quick recovery in these sectors suggests they were better positioned to adapt to the changing economic conditions, possibly due to the nature of their services or their ability to shift operations effectively. This resilience highlights the importance of understanding sector-specific characteristics when preparing for and responding to economic shocks.

Which sectors struggled the most during the COVID-19 pandemic, and what were the implications of their struggles?

Accommodation and Food Services faced delayed recovery, contributing significantly to overall economic variance. Construction and Government lagged in resilience, indicating more prolonged challenges. The struggles of these sectors, particularly those heavily reliant on in-person interactions and public services, had wider implications for the economy. Delayed recoveries in these sectors likely led to job losses, decreased consumer spending, and a drag on overall economic growth. These challenges underscore the vulnerability of certain industries to economic shocks and highlight the need for targeted support and strategic investments to facilitate recovery.

How did the study use Autoregressive Integrated Moving Average (ARIMA) models to assess the economic impact of the pandemic, and what were the key findings?

The study utilized Autoregressive Integrated Moving Average (ARIMA) models to forecast personal income (PI) trends from 2020 Q1 to 2023 Q2, as if the pandemic had never occurred. Researchers then compared these forecasts to actual PI data to quantify the economic effects on each sector. The key findings revealed a striking contrast between sectors. Some industries demonstrated remarkable resilience, quickly recovering to pre-pandemic levels and even exceeding them. Others experienced prolonged downturns, struggling to regain their footing even as the broader economy began to recover. The aggregate economic impact, initially negative at -0.027 in 2020 Q1, plummeted to -1.42 in Q2 before improving by Q4, reflecting adaptation and resilience across sectors.

What insights do the findings offer for policymakers and business leaders regarding economic resilience and recovery?

The sector-specific analysis provides crucial insights for policymakers and business leaders. By understanding which industries are most vulnerable to economic shocks and which demonstrate resilience, targeted support and strategic investments can be implemented to foster a more balanced and robust economic recovery. Policymakers can use this information to develop policies that support struggling sectors, such as providing financial assistance, implementing regulatory changes, and promoting workforce development programs. Business leaders can use the findings to make informed decisions about their operations, investments, and risk management strategies, such as diversifying their revenue streams or investing in technologies that enhance resilience.

Beyond the initial analysis, what further research or exploration could provide actionable guidance for building a more resilient economy?

Future research should explore the specific factors that contributed to resilience in certain sectors, providing actionable guidance for building a more resilient economy. This includes examining the operational strategies, technological adaptations, and policy environments that enabled sectors like Utilities, Retail, Finance, Real Estate, and Healthcare to recover quickly. Further exploration might focus on the role of government support, the impact of changing consumer behavior, and the effectiveness of different business models in withstanding economic shocks. This deeper understanding can inform the development of targeted interventions, policy adjustments, and business strategies to enhance economic resilience and mitigate the impact of future disruptions.