It is hard to analyze the economic and business implications of the outbreak at this stage, as the situation is still unfolding, and it is still early to predicate end of the epidemic.
However, given the current situation, it seems that tourism is bearing the brunt at the moment. What are the other industries that have been affected by the coronavirus so far?
China is, of course, be the most affected one. But remember, China has a very influential economic role in the world economy.
There is a saying that “when China sneezes, the world catches a cold”, so that means that China can disrupt the global supply chain if the situation prolongs.
Chinese exports to the world and Chinese imports from the rest of the world. Both imports and exports are going to affect at least in the short term. Local governments in China have started offering force majeure certificates which can help companies provide a legal excuse for unable to fulfil contractual obligations due to extraordinary circumstances beyond their control.
International business conferences are also hit by the coronavirus.
GSMA cancelled its Mobile World Congress (MWC) because of coronavirus concerns. MWC normally pulls more than 100,000 attendees from 200 countries to Barcelona.
This year’s show was supposed to take place on February 24-27.
The announcement does not come as a surprise, as over the past few days, dozens of major companies announced to skip MWC Barcelona 2020, including LG, Nvidia and Ericsson.
Most analysts knew that the ban on travel would bring devastation to the airlines’ industry. It is reported that Virgin is asking for £7.5 billion from the government. Virgin Atlantic also asked its staff to take eight weeks to leave due to coronavirus.
The US airline companies are also seeking around $50 billion in government aid.
I think with more people are asked to stay at homes and transportation system paralysed, we will see more high streets casualties. Supermarkets would also face a tough time when employees tested positive and shops got closed. All these shops need to pay rents and pay salaries and bills. Taxpayers money will again come to resue.
Ironically, who will support taxpayers?
The impact of the coronavirus is unprecedented. Some industries like airlines are in freefall while others are facing the worst time.
Commodity Inside has started monitoring the impact of coronavirus on the steel industry.