You must have been living on the moon or another planet most likely a lot further away, to have missed the panic & mayhem spreading over the latest spread of the new strain of Coronavirus, COVID 19.
With global statistics as of 10.03.2020 reporting: Coronavirus Cases: 116,654, Deaths: 4,091, Recovered: 64,750 the current trends for countries across the globe are not without their impacts on human movement, health & economies.
When the outbreak of what was then only referred to as the Coronavirous occurred in China, their initial reports were questionable at best. As the epidemic took hold, it was difficult to ascertain what was going on behind closed doors. However, what was evident was the economic impact of a country wide shut down, riding on the tails of the Chinese New Year celebrations.
As Virtually Smart reported 12.02.2020:
‘China itself has already begun to see the impact of how the Coronavirus is affecting their economy. Home sales have already been affected, with a noticeable plummet in the first week of February. Data gathered from 36 major cities saw new apartment sales drop 90% from the same period of 2019 & sales of existing homes plummet by 91%’ (1) At the time, the Chinese authorities were planning a $173b salvage plan to support & buoy their economy.
Amidst factory shut down’s including Nissan & Fiat Chrysler due to shortages of components coming from China, the situation has now escalated to global levels.
International economies are now beginning to feel the affects of the COVID 19 pandemic, with international travel restrictions in place, panic buying of anti bacterial gel in some countries, masks & protective suits being restricted in some sectors, as the medical professions needs are put first.
The larger ramifications of the pandemic are being felt in the stock markets with the New York stock exchange being temporarily suspended on Monday (09.03.2020), when within minutes of trading opening, stocks fell by 1800 points & the Dow Jones Industrial Average finishing down 2013.76 points or nearly 8 percent, the worst single-day drop since the financial crisis of 2008.(2)
Since oil prices have begun to plummet in New York & London, there now seems to be a price war developing. The start of an oil price war at a time when demand is falling due to the coronavirus crisis triggered one of the biggest one-day price falls in history on Monday, roiling global financial markets as crude fell by as much as 30 per cent to nearly $30 a barrel. (3)
Today (Weds 11.03.2020) the Bank of England’s reaction was to reduce interest rates from 0.75% to 0.25% as an emergency reaction to the ‘economic shock’ of the coronavirus outbreak.
Richard Baldwin, a professor of international economics at the Graduate Institute in Geneva has called COVID 19 “as economically contagious as it is medically contagious,” He went on to say that COVID 19 “amounts to a triple whammy for the manufacturing sector in most major economies: outright closures in many Asian plants, supply chain disruptions all over, and topped off with a plunge in demand for cars, electronics, and many other manufactured goods as people take a wait-and-see attitude to the crisis.” (3)
The question which Virtually Smart posed in February 2020 has gathered momentum & greater meaning & that is, who foots the bill? With some countries now restricting movement, with sporting events, concerts & large public gatherings being cancelled; there is a ripple effect of the impact on the businesses who would normally support & benefit financially from these events.
However, with Italy as of 10.30.2020 having made the bold choice to quarantine the entire country & restrict the movements of all 60M of the people; the international economic impacts of COVID 19 can only be set to increase & with rumours of a global recession abound; the global economy is definitely feeling the affects of the ‘economic pandemic’
Closer to home, Virtually Smart have undertaken a small research poll to see if some local UK businesses are beginning to see the negative economic impact of COVID 19.
Here are just a few stories from the UK which are affecting self-employed, independent traders & those in employment alike. (Names have been removed for privacy purposes)
“I follow a lady on Instagram who is already affected. Her main job is a dog walker and now as more people are being instructed to work from home they don’t require a dog walker anymore so they have cancelled her for the next couple of weeks.
Therefore, although both herself and her customers are healthy she is suffering”
“I’ve had 2 projects cancelled as they were on site. My husband’s company delivers furniture, that is all in shipping containers in China”
“Two of my clients have physical shops on the outskirts of London and apparently due to the loss of tourists and locals not shopping there it is a bit of a ghost town. It’s obviously impacting on their businesses, so have asked to cut down my hours”
“My 9-5 is in HR in an amusement park in Scandinavia. We’re scheduled to open on the 3rd of April but honestly, I don’t think we will be allowed. It’s pretty bad because it’s my in laws’ company and 1 month (or more) with a closed company will have a huge impact. And I can’t get paid of course”
“I support private medical professionals and we have seen patients cancelling appointments and operations due to fears of the virus and also not wanting to travel within London. This obviously has a negative impact because of the lost revenue due to empty consulting slots. Some of our patients are also international which obviously isn’t going to help the situation”
“My Mother recruits for the prison service and her employer has started daily temperature checks and cancelled all site visits and face to face meetings”
“A lot of my friends are self-employed & will all be hit by this. One is a makeup artist in the wedding industry & either a) weddings may be banned or b) people cancel as they don’t want to travel.
Another provides care for the elderly, but it looks like they might be shutting schools here soon in which case she won’t be able to work which will leave her clients with no care.
For my husband it won’t affect us so much this year, but next year it will. He’s a decorator in a tourist town and if rentals are down this year, next year there won’t be money for decorating”
As part of our research, we also contacted three local companies who have clients & attendees mixing all of the time in three very different environments. RUME2 is a Co-Working Space, The Body Suite is a Pilates Studio & Core Results is a private gym in Chichester, West Sussex. This is what they had to say about how COVID 19 has changed their outlook.
RUME2 – Chichester
“We aren’t seeing any change in behaviour really apart from a few more people working from Rume2, rather than get the train to London. Certainly no-one is staying away.
We have Coronavirus reminders up for how people should be washing their hands etc & have antibacterial handwash everywhere but that is it at the moment. We do however ask that anyone returning from a category 1 country self isolates.
We have always cleaned the toilets & washed down all surfaces daily anyway so no change there”
The Body Suite – Chichester
“It’s tricky as some people have gone into panic mode & therefore, I have had to send out a health and safety statement. We are business as usual & we remain firm with that decision.
If the virus is a direct threat to my client’s then we will review the situation”
Core Results – Chichester
“So far we have had no reduction in members attending their sessions. The only noticeable difference so far, is that many of the members are using the hand sanitizer before and after their sessions. Sadly, I envisage things getting worse in the next few weeks, if the government take action to reduce unnecessary travel.”
We are facing economically uncertain times & with COVID 19 still set to peak in the UK, the Government are seeking ways to keep our economy afloat & healthy, while also protecting the public interest.
Written by Katy-Jane for & on behalf of Virtually Smart Ltd.
(2) https://foreignpolicy.com/2020/03/09/coronavirus-economic-pandemic-impact-recession/
(3) https://www.ft.com/content/755663c0-62ad-11ea-a6cd-df28cc3c6a68
