In this week’s EconMinute, we’re talking about working from the office.
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At this point in the pandemic, many companies were anticipating having their workforce back in the office like normal. Recently, the spike in cases in Alberta has led businesses to postpone their return-to-office plan. As a result, many find themselves still (or, once again) logging onto Zoom meetings from home. This made us wonder how many people have returned to the office across Canada.
As one component of their global normalcy index, The Economist has been tracking “office use.” Office use is measured by workplace foot traffic in big cities. We use this indicator to get a sense for how many Canadians have returned to the office and what might happen longer-term.
So, how many Canadians are actually back to the office?
- As of the latest data, which includes numbers through mid-September, just over 60% of Canadian workers were back in the office. This number is comparable to that of the US, and a little below the UK. There are, however, a few countries over 90% occupancy, including South Korea, Chile, Brazil, and Hong Kong.
- Though a big increase over the ~30% of people working from the office at the beginning of the pandemic, and the ~40% of people working from home as of last December, 60% is still pretty low, and is roughly unchanged since May.
- There was an early surge in late May/early June where close to 70% of office workers had returned, but it quickly leveled off after that and has not increased since.
- This suggests many Canadians are still signing onto Zoom meetings from the comfort—or chaos—of their own home, or are not working at all.
- This is particularly interesting when contrasted with retail traffic, which has returned to pre-COVID levels as of July. It suggests there is likely a change in where people are shopping–with less economic activity in the coffee shops and lunch spots in city cores and more near home.
Of course, a part of this represents an effort to decrease the spread of the virus (as is the case in Alberta). The bigger question, especially for municipalities which rely on the high property values of corporate offices, is: will all office workers eventually return, or are we seeing the “death of the office?”
Concerns over the death of the office are probably overblown given that the majority continue to work from the office even during the fourth wave. Nonetheless, a return to previous levels seems equally unlikely. Companies are recognizing that many people do prefer to work from home, at least part-time. This will reduce demand for office space—a trend we’re already seeing as some companies are already downsizing or delaying leases. Forward-looking measures of the value of office property suggest that investors, too, believe office space will take a hit. So, while the office seems unlikely to die, it may become more optional.