Baird: Uniforms, Leisure/Hospitality Up in October

While the economic impact of the latest spike in COVID-19 infections will take time to assess, October economic figures reflected a broad increase in payrolls (+638,000) and a continuing recovery in leisure/hospitality and uniform rental revenue from the low point in April, according to a recent report from Robert W. Baird & Co.

Unemployment dropped a full percentage point last month to 6.9%. While that’s the sixth straight month of declines, the current figure is still nearly double that of February, when the jobless rate stood at 3.5%, according to the National Bureau of Economic Research/U.S. Bureau of Labor Statistics.

In any event, Baird analysts Andrew Wittman and Justin Hauke sounded an optimistic tone in their Nov. 6 Facility Services report, noting that “Big gains this month were seen in leisure and hospitality, previously hardest hit, as well as professional business services, retail trade and construction. Hours worked/wage growth have stabilized.” In a cautionary note, they added that “weekly unemployment claims remain highly elevated.”

Meanwhile, the October payroll data was “very solid,” with roughly 55% of shutdown-related job losses now regained. “Importantly, October’s gains showed that the pace of recovery is not slowing, with good gains across nearly all verticals, including retail trade, professional and business services, and leisure and hospitality.” A summary of “key stats” on employment cited in the report include:

• Leisure and Hospitality: +271,000, though this hardest-hit sector is still 17% below its peak in February
• Construction: +84,000 (only 3.8% off from its peak)
• Manufacturing: +38,000 (roughly 5% off its peak)
• Healthcare: +58,000, led by physician/dental offices, and still roughly 950,000 below its peak level

As for workwear, the report was upbeat, noting that uniform-wearing employment had experienced broad-based gains, with an increase of 317,000 jobs in October. The recovery in this sector is exceeding that of the broader economy, having earned back roughly 65% of pre-COVID losses, vs. roughly 55% for the economy as a whole.

Readers with questions may contact Wittman and Hauke at awittman@rwbaird.com or jhauke@rwbaird.com. As for the future, Wittman declined to speculate, noting in an email to Textile Services Weekly that the October figures were the latest available.