Blog Post
The Impact of the Coronavirus on Global Business Activities
Mohammed Atif • 25 March 2020
Coronavirus and the Global Market
The Coronavirus (COVID 19) has hit the business and financial world like a bolt from the blue. Not just countries alone, but entire regions have been affected and it looks like this trend will continue in the foreseeable future. It is unlikely that any country would remain unaffected by the social and economic impact of this virus.
The massive lockdowns in China meant that the parts and raw material supplies were disrupted, and assembly lines were halted even in places that have not experienced this contagion. Moreover, the near-complete stoppage of the supply chain meant that factory workers were out of work and shelves became empty.
Market Meltdown
Add to that the fact that stock exchange players responded to the pandemic by pulling their investments from the market. This let to a nosedive in the values of even blue-chip companies.
Many companies have realized the vulnerability of their supply chains. They are now aiming to relocate their raw material production to different regions all over the world. In the long run, it will dynamically change the economic map of the whole world.
Changing Consumption Patterns
Europe is one of the largest consumers of products in the world due to its high purchasing power. Unfortunately, it has been badly hit by the virus. This means that even if the virus abates soon, it will be a long time before Europeans go back to their old consumption levels, thus leading to a global recession.
Coronavirus and the Global Economy
The travel industry has been particularly hard hit and many airlines are now laying off their workers by the thousands. As aeroplanes sit idle in their hangers, it is feared that even some of the biggest airlines may be forced to file for bankruptcy.
The very nature of the virus effectively ensures that our consumption patterns will be fundamentally altered, at least in the foreseeable future. Globalization has created a closely knit economy with nations dependent on each other for both production and consumption. This trend is almost certainly set to change, and companies will try to source their supply lines closer to home to ensure minimum disruptions.
The tourism and travel industries will take years to recover as people gather up the courage to visit exotic foreign locales, once again. Meanwhile, visa regimes will become considerably tighter because it was the free flow of people all over the world that led to the rapid proliferation of cases. After all, the virus jumped from continent to continent within days.
Conclusion
The shrinking of global trade is also an almost certain reality because far too many people have lost their jobs and now, they don’t have the resources to resume their original consumption levels.
The psychological impact of the virus would also have profound implications on economic activities, even after the pandemic has ended. People would be hesitant to meet and hang out in large groups and gatherings. This will lead to a surge in services that cater to entertainment at home.
Consumers will prefer websites and online stores over heading out to buy products. This will lead to a massive demand for web hosting and design services. Fingers crossed!
If you need any help with any of your IT or Digital Marketing campaign please get in touch with one of our consultants.
Esolutionmate is an IT company based in Adelaide, South Australia specializing in Web Design, SEO, Mobile App & IT Solutions.
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