The #1 question on many investors’ minds is “what will the US economy look like as it reopens?” Will people go out to shop? How quickly will economic activity return to normal? Will we all just work from home?
To answer that question, we’ll use are new best friend: TomTom traffic congestion data, which crowdsources information about users’ vehicle speeds and location to determine how busy a given city is in real time and hour-by-hour.
First up: Vienna, because Austria has started to allow smaller shops to reopen as of last Monday.
Here is the 7-day trend in traffic (in red, 2019 average in blue):
Next up: Copenhagen, which saw children start to return to school last Wednesday and even hairdressers/barbers can open starting tomorrow:
And finally: Prague, which also started to reopen last week:
Before we draw conclusions, let’s look at three important Chinese cities as comparison points:
First, here is Beijing:
And finally. Shenzhen:
Here is what we make of all this:
- There is a notable difference in weekday traffic between the Chinese and European cities.
Drive-time (morning and evening commutes) traffic is heavier in China’s major cities relative to those in Austria, Denmark and the Czech Republic. In the former cases, it is almost back to normal levels while in the latter it is not. Whether this is due to semi-permanent work-from-home arrangements or the nature of work in each location is hard to know just yet but the difference is striking.
Conversely, midday traffic looks more normal in the European cities than in China. We think that correlates with commercial activity and resultant truck traffic. In Prague, Copenhagen and Vienna that seems to speak to increasing internal demand as those nations start to resume normal-ish life. In China, reduced export demand likely keeps midday truck traffic low.
- This past weekend’s traffic patterns also look quite different. The European cities are almost back to normal, but Chinese congestion looks quite light.
That tells us that consumer demand is coming back online faster in Europe’s reopening countries than it has in China.
- We see 2 conclusions in this data:
If a country saw limited impact with COVID-19, as was in the case in Austria, Denmark and the Czech Republic, then consumer behaviors seem to return to normal fairly quickly.
China is a case study of somewhere that obviously took a larger economic and societal hit from the virus. Consumers there are still wary.
Why this matters for the US: America’s experience with COVID-19 looks like equal parts China (New York, New Jersey, Pennsylvania, and Massachusetts combine to 52% of all known US cases) and that of the European cities we’ve covered today (more like the rest of the US). That means America’s economic restart will be lumpy, with some regions vastly outperforming others. Related to our point in “Data”, this uneven recovery will be hard to measure using standard nation-wide measures of things like labor market conditions and inflation. On the plus side, however, consumers in many parts of the US should feel more upbeat than those of us who have remained in New York City.