One school of thought is the coronavirus is similar to the common influenza and the pubic is overreacting. Others believe this virus is far more contagious and dangerous than what is being reported in the media. Regardless of where the truth lies, the coronavirus is having a huge impact on business.
This virus spread rapidly, and has infected people in almost every major country in the world. The global economic impact has yet to be determined, but it’s significant, no doubt.
The lockdown in China is interrupting production and supply chains across the world in automotive, high-tech manufacturing and virtually every retail industry. Disrupted health care supplies of pharmaceuticals and medical equipment will prove to be problematic. Cargo ships are quarantined in many ports, unable to offload needed supplies. As supplies become limited, prices could go up very quickly.
The global travel and tourism industry has already been devastated. Multiple countries have issued travel bans. Cruise liners are being quarantined when passengers show signs of infection. Amazon, Apple, Google and Microsoft are restricting travel for their employees, as are hundreds of other companies across the world. Business conferences and trade shows are being canceled at unprecedented levels.
The Department of Homeland Security temporarily closed its Washington state offices, as did Facebook, Amazon and several schools. Thousands of other business and schools across the globe have done the same thing.
This outbreak of the novel coronavirus has wiped out trillions of dollars in wealth in just one week, as the US stock market suffered the biggest decline since 2007. Consumers are avoiding discretionary spending in stores, restaurants and other businesses. Goldman analysts believe if the virus continues to spread, profits of S&P 500 companies may fall as much as 13%, forcing thousands of layoffs.
Governments, businesses and industries all over the world are reacting to this virus in ways they never have before. Economically, it will impact all of us much more than the common influenza.
