As the effects of the Covid-19 pandemic continue to reverberate, various sectors of the economy are confronting a different kind of menace. While vaccines for coronavirus are under the development stage and some of the initial treatments are showing positive signs of success, the potential human impact of the coronavirus outbreak is immense and a cause for global concern. Besides, the coronavirus outbreak has the potential to trigger an economic crisis. Experts at Infiniti Research currently expect to see a negative impact on all sectors of the economy, from the pharmaceutical industry to luxury good makers and beyond. Here’s a comprehensive insight into the setback brought by the coronavirus outbreak across various industries.
Impact of Coronavirus Outbreak on Different Sectors of the Economy
Automotive Industry
Challenged by already weak growth rates in 2019, the automotive sector is estimated to be heavily impacted by the coronavirus outbreak. With all manufacturing coming to a standstill and temporary closures of plants due to collapsing demand and supply shortages, the effect of the coronavirus outbreak on the automotive industry is unprecedented. The experts predict that there will be a further demand slump in the automotive segment since the government has extended the factory’s shutdown in some Chinese provinces. As such, automakers will need to take a gradual approach in ramping up production operations based on market demand, without compromising the safety of employees.
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Logistics Sector
According to World Logistics Council, logistics is a huge sector contributing to over 20% of the global gross domestic product (GDP) and around 8% of global employment. With the coronavirus outbreak, the logistics sector has taken a dip. Besides, the initiatives undertaken by the government to prevent the spread of coronavirus, such as lockdown and social distancing are impacting the demand for goods and causing a threat to the global supply chain. Also, recent researches predict that the breakdown of coronavirus is worse than the SARS epidemic. To gain a competitive advantage in the long run, companies in the logistics industry will need to understand their direct supply chains and the inherent risks they may be exposed to at the secondary or tertiary supplier and customer levels. By being aware of these risks, logistics companies can focus on formulating corporate strategies and business planning.
Pharmaceutical Industry
A recent survey of healthcare market research experts revealed that around 85% of pharma companies are concerned about the impact of coronavirus outbreaks on their company’s performance, with the Asia-Pacific market expressing the highest level of concern. As China accounts for over 80% of the global active pharmaceutical ingredients (API) production, the coronavirus outbreak has compelled major pharma companies across the world to bring operations to a complete stop, resulting in a palpable short-term impact. Besides, the novel coronavirus outbreak could also derail thousands of ongoing drug trials that companies in the pharmaceutical industry are running to test new drugs. As such, pharmaceutical companies need to act swiftly to build organizational resilience, address talent management risks, and drive clear communication with suppliers.
China has been worst hit by the covid-19 outbreak and its slowdown is rapidly hitting global supply and demand. For a detailed evaluation of the implications of the coronavirus outbreak on your organization, contact us here.
Retail Industry
As retailers are compelled to close their stores in order to stave off the coronavirus outbreak, the retail sector is estimated to be heavily impacted by Covid-19. Also, major retail brands are witnessing a negative financial hit in the first quarter as a result of the epidemic. While some others are running under reduced hours with significant footfall losses. Also, with people scarcely venturing out of home, retail brands are bound to witness plummeting sales over the coming weeks.
However, the challenges vary across various segments in the retail sector. For instance, the grocery sector is facing challenges in coping with the sudden surge in traffic and product demand owing to rising customer adoption of online channels to meet their grocery and daily needs. As such, retail stores are in need to stay prepared to act quickly and address short-term disruptions.
Food and Beverage Sector
Like all other sectors, the coronavirus outbreak has a severe impact on the food and beverage industry. While some processes food companies are witnessing a surge in demands, others such as restaurants and retail food establishments are encountering shortages of food supplies and workforce management issues. Therefore, companies in the food and beverage industry will need to take action to mitigate the risk and streamline supply chain operations.
The unpredictable nature of the coronavirus outbreak is making it difficult for companies across various sectors to efficiently plan their next moves. That’s why we take special care to deliver reliable research. Our market research experts can help you to understand how covid-19 could disrupt your organization and provide data-driven insights to help you make your next moves.
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