Airlines are cancelling flights; employers are recommending that their employees self-isolate and shoppers are panic buying at supermarkets. Amazon though is having a heyday. And you’ll have to take out a loan to pay for a week’s supply of hand sanitizer and bacterial wipes. The sad news is that as of 6 March 2020, there are 100,000+ confirmed global cases in 93 countries accompanied by more than 3,4000 deaths.
But what impact is coronavirus aka COVID-19 having on business and the economy? While some companies are optimistic and predict that consumer spending in the US and Europe will remain unscathed, others have a more dismal outlook. Some say that if the threat of COVID-19 extends beyond three months into the new year, then businesses and, by extension, economies will falter.
And the first bit of big bad news came this week. Oil prices slumped below $50 per barrel for the first time in more than two years. $5 trillion was wiped off stock markets as buyers and sellers scrambled over falling share prices. This sell-off is the worst that the world has seen since the 2008 Great Recession.
And then there’s the issue of manufacturing. For the last 10 years or so, there has been a growing reliance on China both as a customer and supplier for UK, European and US businesses. China and Japan supply Europe and the United States with parts for factories and also complete products, including vital technologies. Without these parts and products, manufacturing output will be detrimentally impacted, leading to a slow-down in growth.
Bank of England governor Mark Carney predicts that worldwide economic growth in 2020 will be lower than anticipated but he is confident that the UK economy will remain steady – for the moment, at any rate.
Apple Inc also claimed that the situation in China was returning to normal and that the tech giant had reopened all its factories there. In Germany, Volkswagen stated that its output this year would be very much the same as in 2019.
The gloom-mongers among us say that the virus will spread quickly through Europe and the US. Consumers will be off work and will avoid shops, bars, businesses and many other brick-and-mortar businesses. And there will be obvious consequences for such inactivity.
If the virus is contained, there’ll be a quick bounce back – something that everybody is hoping will happen. If not, who knows what or where COVID-19 will take us? To the brink of another recession. For now, let’s all keep a clear head and be positive. Who knows what fate the Worldometer will bring tomorrow?