Spring has sprung, and the Massachusetts economy is stirring out of COVID-19 hibernation.
Economists have long predicted that vaccinations would jumpstart spending, and early signs are that people who are fully protected — nearly 1.5 million so far in Massachusetts — are eating out, going to salons and gyms, and returning to activities they otherwise avoided during the pandemic.
For the hardest hit sectors of the state’s economy — travel and tourism, restaurants and bars, any business that relies on face-to-face interaction with customers — the combination of jabs in the arm and nearly $3 trillion in federal relief money authorized since December is offering tangible hope that more than a year of layoffs and austerity is finally coming to an end.
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Try, for example, to get a hair appointment anytime soon. Nicholas Penna, owner/stylist of Salon Capri with locations in Boston, Dedham, and Newton, said senior stylists are booked through the end of May.
Penna said the surge is driven by older clientele who largely stayed away since the pandemic began in March 2020.
“I have had days when every single person who sat in my chair is fully vaccinated,” said Penna.
Restaurants in Massachusetts have experienced a dramatic increase in indoor dining, up about 37 percent from Feb. 1 through the end of March, according to Paytronix Systems, a Newton software company that tracks spending at 30,000 dining locations across the country.
Paytronix chief executive Andrew Robbins said some of the increase can be attributed to normal seasonality with warmer weather drawing out patrons. But what’s remarkable to him is that the uptick is not coming at the expense of restaurants’ take-out business, which saw a 29 percent bump during the same period.
Robbins said he didn’t expect to see an improvement so soon given that most of the people in the state are still not fully vaccinated.
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“I thought it was going to come later. . . in the May time frame,” said Robbins. “A lot of this is improved sentiment. People are feeling better about things. They are tired of being in their cocoons.”
To be sure, the recovery has a long way to go, with businesses operating under COVID-19 capacity restrictions and downtowns still ghost towns because of the persistence of remote work. And much as the pandemic crash was felt most severely by lower-income workers, so too the rebound is highlighting inequities. Many hourly workers who lost their jobs are struggling to find work while large numbers of white-collar employees barely missed a beat as they worked remotely.
Employment has almost fully rebounded for workers in the state earning more than $60,000 a year, but it remains down 30 percent for those who make under $27,000 a year, according to data through early March tracked by Opportunity Insights, a research project at Harvard University.
Meanwhile, variant strains and rising infection rates, especially among younger people who are not waiting for the vaccine to resume normal life, could deal us another setback. Watching nervously as Europe locks down once again, President Biden and Rochelle Walensky, director of the CDC, are pleading with states not to reopen too fast and to reinstate mask mandates.
A major threat to the fledging recovery is the hesitancy of many people to get vaccinated, according to Alicia Sasser Modestino, an associate professor of public policy, urban affairs, and economics at Northeastern University.
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“We are going to hit a wall at some point where the progress on vaccines is going to stall out,” she said.
For now, at least, the trends are good.
People in Massachusetts are spending more time outside the home than at any point since October, according to Google data that track movement using mobile phone location data.
Consumer spending in the state was 10 percent above pre-pandemic levels in mid-March, fueled by increases in online and in-store retail purchases, data monitored by Opportunity Insights show. Stimulus checks and enhanced jobless benefits have put more money in the hands of lower- and middle-income consumers, economists said.
And on Friday, the Labor Department issued a blockbuster employment report, with the US economy creating 916,000 jobs in March, the most in seven months. Also in March, a hiring index of small businesses in Massachusetts posted one of the largest one-month increases among 20 states tracked by Paychex and IHS Markit.
“What you are seeing now is a strong bounce back in the Northeast because of the depths of the job losses in the pandemic,” said Jim Diffley, executive director of economics at IHS Markit.
Pedro Aguirre, owner of Vanity Loft Salon in Mission Hill, is among those small business owners who are looking to hire. Bookings have doubled over the past six weeks, and he wants to add a fourth stylist to keep up with demand.
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Among Aguirre’s clients who recently returned was Kath Koval. The 64-year-old insurance adjuster was due for a visit in January, after being away for months, but she skipped the appointment as the virus raged over the winter.
“It wasn’t necessary for me have my hair cut and colored when it seemed like the virus was worse than it had been,” said Koval.
She got her first vaccine shot in February and the second one on March 9. She was back at Aguirre’s salon a couple of weeks later. She also recently returned to the Natick Mall for the first time since the pandemic began and has planned two trips, one to New York City and another to the Jersey shore.
Now that she is vaccinated, Koval said, venturing out is “really so much less stressful.”
Perhaps the surest sign of optimism is how many people are ready to have fun whether they are vaccinated or not:
- Grand Circle Corp., which specializes in small-group international travel for people 50 and older, has booked 71,000 passengers for trips in late 2021 through 2023. While business remains far below a typical year, average weekly bookings over the last month have been up 30 percent from earlier in the year.
- Attendance has been rising at Showcase Cinemas’s eight locations in Massachusetts over the last few weeks. The chain has had to increase show times to accommodate the steady flow of movie-goers, even as private screenings remain a popular option on the weekends. “Godzilla Vs. Kong,” which opened Wednesday, is on track to be the biggest box office hit since the beginning of the pandemic.
- It’s not uncommon to see lines form out the door at Boston Bowl in Dorchester on Thursday, Friday, and Saturday nights. League bowlers have also returned, as have bookings for small birthday parties.
“The energy is almost palpable,” said Colleen Fleming, director of marketing for Boston Bowl and Boston Bowl-Hanover. “There is an expectation from the community they can come back, be safe, and have fun and a little bit of normalcy.”
But whether businesses will turn profitable on their own in 2021 remains an open question. Many continue to operate under COVID-19 restrictions that prevent them from operating at full capacity. In order to comply with the state’s 6-foot social distancing requirement, Boston Bowl, for example, blocks off every other lane, and Showcase Cinemas caps theaters at 50 percent attendance.
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The recovery in downtown Boston remains slow, as many people continue to work from home instead of returning to the office.
Business at JointVentures, which operates 10 physical therapy clinics in Massachusetts, is back to about 75 to 80 percent of pre-pandemic levels, but there is a telling split: Suburban locations are now seeing more clients than they did before the company was forced to shut down in March 2020, while those in Boston and Cambridge are still down about 50 percent.
“There has been a suburbanization of the workforce as people work from home,” said co-owner Dan Brownridge.
Yet Brownridge said he’s optimistic that his urban clinics will bustle once again.
“Offices in the Financial District are maybe 15 to 20 percent occupied, but our location there is about 60 percent booked,” he said. “If only 60 percent of people come back to the office, we’ll be fully booked. Life in the city is going to be much more vibrant again.”
While they may not be back in the office yet, some people are already hitting the gym to shed “the quarantine 15″ — the pounds packed on while working from home.
“We are getting crushed right now,” said Julian Cardoos, owner of Rebirth Body Transformation Center, a personal training studio in Wakefield, citing a surge in old clients returning and new ones signing up over the past several weeks. “They want to be presentable when they see their co-workers for the first time.”
But beyond bottom lines, business owners sense it is the shift in attitudes among customers and employees that makes this period in the pandemic feel different.
“A hair salon is supposed to be a happy place,” said Penna, the owner of Salon Capri. “For a year, it hasn’t been the case. It’s nice to have that vibe back.”