Post-Covid work patterns will have a significant effect going forward in Europe.
During the Covid-19 lockdowns, the share of office employees working some time or usually from home more than doubled, from 28% in 2018 to 67% in July 2020 across the EU’s 27 countries (source: Eurofound). Of course, this increase has not gone unnoticed, as newspaper headlines emerged to debate the future of the office.
To add to this ongoing debate, we attempt to quantify the possible impact of home working across 25 European office markets using five key variables that reflect on different elements of the demand and supply equation. This will allow us to determine how resilient each market is to these expected changes from working from home (WFH).
First of all, we consider traffic congestion data to derive a local market impact from home working (source: IRIX). During the lockdowns, congestion declined by 51% on average and we assume that when lockdowns are lifted, city congestion levels will return to normal. In the future, we assume that office employees in cities that have a higher congestion rate have more incentives to increase their home working than elsewhere. We take this estimate together with the reduction in office space per employee over time (reduction from 19sqm in 2003 to around 16sqm in 2019 on average in Europe) and the forecasts of office using employment.
Based on this, we can derive a city level office employment growth estimate while controlling for the future increase in home working for each city.