The coronavirus outbreak ravaging all parts of the globe has infected countless people. At the same time, its spread has left businesses, and manufacturing all around the globe shattered, leaving behind a lot of unknowns. Hundreds of thousands and likely millions have, and shall lose their jobs, and the majority among them will be the ones who can least afford to lose their sole source of livelihood.
While the imminent future looks towards a recession, far more crippling than the economic meltdown of 2008, sectors across the spectrum of the economy are impacted. The fact is that almost all the industries and market sectors will be affected by it, directly or indirectly. Leaving some sectors (who might even thrive due to COVID-19 pandemic), everywhere else, it is expected to face a major financial crisis.
Markets and Industries That COVID-19 Has Hit First
However, some markets have already faced heavy losses due to near-global shutdown. Here is a brief look upon the major financial and business sectors that this pandemic has affected the most. (In no particular order.)
Needless to say, travel and tourism are intricately linked, the global coronavirus outbreak means millions of travel and tourism jobs are at risk. The industry came to a grinding halt as the airports shut down across the globe in a rapid succession followed by cancellation of existing visas, and refusal of the government bodies to issue fresh entry into the country. The stats don’t say otherwise, the World Travel and Tourism Council (WTTC) says up to 50 million jobs could be lost because of the pandemic.
Flourishing Europe tourism stands to lose up to a billion euros every month. Italy, the infamous epicentre of Coronavirus in Europe stands to lose no less than 5 billion euros, this tourist season alone. Even tiny landlocked country as Nepal, but which substantially depends on tourism, has been hit hard. The government which recently cancelled the much anticipated, Visit Nepal 2020 campaign, has decided against issuing permits for spring expeditions across all mountains.
Hospitality (Hotels, Restaurants, Etc.)
According to a global hospitality data company STR, from an analysis of 68000 hotels from around the globe, occupancy is down as much as 96% in Italy to 68% down in China, 67% down in the United Kingdom, 59% down in the United States and 48% down in Singapore, as compared to the 2019 figures. The Indian hospitality industry could alone count to losses mounting over ₹620 crores. Layoffs of ‘casual staff’ or ‘contracted staff’ is likely, and the number could reach a staggering number in millions of jobs lost, from general managers to housekeepers.
The aviation sector has been caught in the farrago of airports around the globe shutting down, and thousands of Boeings and Airbuses crowding for parking space in eerily deserted airports. Cancelled flights, lost sales and substantial reductions in service for months to come has the airlines’ company looking blankly at an existential threat. The grave effects of the global pandemic could wipe out up to $113 billion in worldwide revenues this year just this year. In what is being purported as an economic crisis severe than the 2008 economic meltdown, ecosystems of restaurants, stores, cab shuttles, and hotel chains will be too impacted due to the depressed aviation sector.
Countries around the world are seeing reduced levels of air pollution and greenhouse gas emissions, but this has come at the cost of globally wrecked economy, which has seen most forms of travel, airplanes, and trains and buses alike grind to a complete halt. Mega industries have closed down, the demands for oil has hit an all-time low, and countries around the globe are running out of storage facilities to store the crude oil. But the major producers in the middle west and Russia haven’t cut on the oil output yet, which has led to the market being flooded with cheap oil. The per-barrel price of the oil is continuously on the decrease.
Finance and Banking
The banks, in particular, have seen falling interest rates, the Federal Reserve, last week lowered its main borrowing rate by half a point to combat the economic drag from the outbreak. And since the business has hit a complete halt, another cut may be coming soon. For institutions whose main source of revenue is the interest on loans, the banking sector has also seen defaulted loan payments, slowed business and is plunging deep down into uncertainty. Customers at the same time are faced with limited, or closed banking hours and uncertainty about their savings.
The major stock markets too, have been pry to the volatilities of the pandemic. Major corporations around the globe, as the Reliance Industries largely based in India, have lost substantial valuation of their share.
Governments and corporations around the globe have adopted the quintessential principle of cost-cutting on non-essential services. Consumer behaviour concerning automobile and technological upgrades have been on a recline. Construction, Big manufacturing, Chemical Manufacturing which would require the interaction of hundreds and thousands of workers, and could be the hotbed of Corona transmission have shut down their operations and sent the workers home. Supply chain in almost all sectors have been disrupted, and even online services have been struggling to deliver to the customers.
Service industries as the Music and entertainment have seen the cancellation of all events whatsoever, and the health authorities and local administration have been a check to prevent any gatherings. Cinemas, theatres, museums, art galleries have shut down their doors, and have seen a total lockdown of services. Sporting events as the European Football Leagues (EPL, La Liga, Seria A, Bundesliga, etc), NBA season, and the much sought over the cricketing event, the Indian Premier League has been postponed indefinitely.