Pandemic, Policy, and Places: The Critical Issues for Westchester

Recap of People’s United Advisors Market Update Call: October 29, 2020

A silver globe of the Earth sits on a pile of paper currency from around the world


  • The three overriding current issues for the nation, and for Westchester specifically, are the course of the pandemic, government policies, and the importance of place: where people live and work
  • While COVID infections are spiking again, death rates are not, as we come to understand more about the virus. And the death rate in Westchester is far lower now than in the country’s hardest-hit areas. Overall, we think we’re about halfway through the pandemic.
  • Like the country as a whole, Westchester needs additional government stimulus, especially to help out employees of heavily-impacted service industries like retail and hospitality.
  • As the transition to a knowledge-based economy continues, Westchester’s location near the New York City “knowledge cluster” is close to ideal.

THE THREE CRITICAL ISSUES GOING FORWARD for Westchester County and the nation as a whole, as we see it, are the future trajectory of the pandemic; the policies, especially fiscal policies, that we can expect from Washington; and the places where people live and conduct business—the “three Ps,” as we’ve dubbed them.

COVID: We’re Not Going Back to the Dark Days
The virus-infection rates are peaking again, but we’ve also learned more in the past few months about how to treat patients, and we expect a vaccine to be widely available by next year. The national daily death rate, while still prohibitive, is staying about level at 700—down from about 2,000 in the dark days of April. And many of the newly affected are young people, many of whom are apparently spared from COVID’s worst effects.

In addition, the mortality rate of hospitalized patients has declined from about 20% to 8%—still totally unacceptable, but a sign of progress. Altogether, if we get the vaccine that we expect, we think we’re about halfway through the pandemic: eight months in, and about eight months to go.

But it’s the local experience that counts, and the situation is much better in Westchester than nationally. The infection rate in the county is lower than the national average, and far lower than in the worst-hit areas. For example, while some 2,500 people contracted the virus in Winnebago County, Wisconsin (home to Oshkosh) over a two-week period in mid-October, the comparable number for Westchester was 1,200—even though Winnebago’s population is about 170,000, versus a million for Westchester. If Westchester residents continue to take the steps necessary to help stop the spread of the virus, we’re hopeful that the county can avoid a spike in infections, hospitalizations, and deaths. We don’t see a return to the tragic days of the spring season.

More Stimulus Is a Necessity
The Westchester economy is a microcosm of the nation’s, and in both we’ve seen a transition from a blue-collar model to service-based, knowledge-based industries. Unfortunately, the service industries, which are the lifeblood of Westchester’s economy, have been the most-damaged by the pandemic. Retail and hospitality companies alone account for 18% of the county’s economy—in an environment where New York’s Times Square Hilton has closed permanently.

And so additional fiscal stimulus from Washington is key to Westchester’s economic health; a delay in legislation would hurt the county seriously, especially Yonkers and Mount Vernon. The timing of new stimulus is uncertain because of political wrangling in Congress and the upcoming election, but we think that it will come before too long. Investors are assuming a $1 trillion package, which we believe would be consonant with GDP growth of about 3%. More stimulus than that would probably fuel higher growth.

Knowledge-Based Economy Favors Westchester
Finally, as to Place, Westchester sits right next to New York City and not too far from Boston, two of the greatest centers of knowledge and innovation in the world. And the county is itself a home to industries like biotech. With the national economy emphasizing knowledge-based sectors and transitioning to more work at home, the future looks encouraging for Westchester.

What are the strengths of a “knowledge cluster” like New York? We’d point to four things:

  • Human capital: Lots of brainpower, and not just in the universities but throughout the economy.
  • Investment capital: Access to financing sources such as venture capital and private equity.
  • R&D: The ability to spend and receive research funds; in 2019, New York State was second only to Massachusetts in awards from the National Institutes of Health.
  • Educational institutions: A home for the think tanks of universities, and of course, New York boasts some of the greatest in the world.

A good example of how the knowledge cluster of New York is symbiotic with Westchester is Regeneron Pharmaceuticals, which developed a COVID drug that was given to President Trump. The company was born out of Columbia University’s research labs and matured in Tarrytown, which offered them the space they needed to grow and, more important, the talents of the engineers, chemists, and support people who live in Westchester. Regeneron is at the cutting edge of understanding and eliminating the pandemic.

Overall, we’re confident about the national economy reviving, particularly in the Northeast and Westchester specifically. We think that the county is situated perfectly to take advantage of the new working and living models that were no doubt coming anyway, but much accelerated by the pandemic.

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