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15 Industry Impact from Covid 19:Economy Impact Lets Take a Closer Look

15 Mins read

The corona pandemic and the associated lockdown of public and economic life also affected many industrial companies in 2020. Little is known about the actual effects at the production level. As part of its survey on modernization of production, the Fraunhofer ISI, therefore, carried out a special survey with 237 companies to investigate questions about short-time working, the start of production after the crisis, possible restructuring measures, and digitization trends.

The lockdown in 2020 largely restricted public life and large parts of industrial production. Numerous companies suffered production collapses or were affected by delivery problems from their suppliers. As a result, a number of companies switched to short-time work and reduced their production. After the end of the lockdown, many companies were unable to return to pre-crisis levels. The corona pandemic resulted in enormous losses for the industry, which has long-term effects.  

A survey by the auditing and consulting company KPMG in July 2020 showed that only 10 percent of the companies surveyed did not see their sales affected by the pandemic. For the next twelve months up to mid-2021, 28 percent assumed that they would be able to reach the pre-crisis level again. For 42 %of those surveyed, this is not in sight until 2022; 20% expect their company to be able to return to pre-crisis sales only after 2022.

“When times get tough, we look for guidance. For small business owners, that means looking to business leaders for their views on how the economic stall from the pandemic will play out. “Gabby Rolette

 Key Statistic of Industries impact from covid

  • By 2024, one percentage point of additional productivity growth in each nation will result in per capita GDP increases ranging from around $1,500 in Spain to around $3,500 in the United States.
  • Customers’ shopping preferences shifted due to COVID-19.
  • According to a survey, 65 percent of retailers base store network decisions on brick-and-mortar results rather than considering how changes could impact omnichannel. That’s a formula for irrelevance in a world where customers select their retailers based on their digital offerings.
  • A recently surveyed 300 European senior executives to understand their COVID-19 approach better and determine what was working best. One key finding was that the most significant strategic lever was business-model creativity. New digital experiences and new partners were listed by nearly 90% of successful businesses. New digital experiences, new alliances, faster product growth, and other improvements to the business model were cited by nearly 90% of the successful companies as making them more competitive.
  • A survey by the auditing and consulting company KPMG in July 2020 showed that only 10 percent of the companies surveyed did not see their sales affected by the pandemic. For the next twelve months up to mid-2021, 28 percent assumed that they would be able to reach the pre-crisis level again. For 42 percent of those surveyed, this is not in sight until 2022; 20 percent expect their company to be able to return to pre-crisis sales only after 2022.
  • As far as short-time work is concerned, around 60 percent of the companies surveyed applied for it.
  • At 34 percent, all employees were on short-time work, at 26 percent apart.
  • Small companies (less than 50 employees) reported short-time working less frequently (55%) than larger companies with 50 or more employees (66%).
  • Only every fifth company (22%) was produced at the same level as before Crisis.
  • The vast majority of farms, around two-thirds (68%), only achieved a lower production volume.
  • Only every tenth company (10%) has a higher production volume than before the lockdown, but it remains to be seen whether this is a short-term effect or a long-term benefit. It should be noted that end product manufacturers started production again more quickly than supplier companies.
  • 51 percent of the companies surveyed have either reorganized their production processes or are planning to restructure their supplier network. A small proportion of the establishments (13%) even carried out restructuring measures in both areas. As a result, there are no more robust production processes and networks in the industry during and after the lockdown in spring 2020.
  • At the end of January 2021, 3.83 million people were unemployed. Around 730,000 were affected by the increasing short-time work in January 2021. In addition, almost 350,000 self-employed persons received exceptional government support because they had to cease their economic activities.
  • In December 2020, the number of overnight hotel stays fell by 81.2 percent compared to the previous year’s same month.
  • An aid program for the tourism industry announced by the government (with EUR 2.5 billion in guaranteed loans and EUR 859 million to promote innovation in the industry) seems rather modest because of the billions in losses in the sector. Industry representatives cautiously adopted the second package of measures from December 2020 with rent reductions, tax deferrals, and new loans.
  • In 2021, revenues are expected to remain 58 billion euros below the pre-crisis level, as per the business newspaper Expansion reported.
  • Construction investments in the 4th quarter of 2020 were 17.5 percent below the previous year’s level. The cement consumption determined by the Ministry of Industry rose sharply by 8.2 percent in December 2020, adjusted for calendar changes. compared to the value of December 2019.
  • Retail sales in December 2020 were only slightly below the previous year’s level. The daily adjusted index of the statistical office showed a minus of only 0.4 percent.
  • Nonetheless, consumer confidence suffers in an uncertain economic and labor market environment. According to the European Commission, this was 23.7 points below December 2019 in January 2021.
  • The crisis hardest hits tourism, gastronomy, and tour operators. For the catering sector, the semi-lockdown since October 26, 2020, and the previous closure of bars and restaurants at 6 p.m. has made the situation critical again.
  • Overall, almost all industries have been hard-hit by the consequences of the corona crisis and will probably take a long time to recover. A study by the management consultancy and the Bank Intesa Sanpaolo from the end of May only sees the pharmaceutical industry with growth prospects in 2020. The manufacturing industry will lose at least 15 percent of its sales in 2020 before, in the best-case scenario, it could grow 5.3 percent again in 2021 and around 3 percent in each of the following two years. Production rose again in July and August without even coming close to the previous year’s figures. 

List of  industries got increased in sales during covid 19

Productivity has long been a stumbling block to global development, but the recession may have sparked a surge in productivity.

Productivity improved as businesses moved quickly to online platforms, automated manufacturing tasks, increased operational performance, and accelerated decision-making and operating model innovation—and further development could be on the way.

According to a recent McKinsey Global Institute report, annual productivity growth can be increased by around one percentage point between now and 2024.

The stakes are incredibly high. By 2024, one percentage point of additional productivity growth in each nation will result in per capita GDP increases ranging from around $1,500 in Spain to around $3,500 in the United States.

 Let’s look at the industries that got sales to increase during Covid 19 (A list of the industries that decreased during covid 19 is here).

1.Covid impact on the staffing industry

According to the recent data from bls.gov, temporary support providers added 8,100 jobs in September 2020, dropping from previous months when over 100,000 jobs were added per month. However, the American Staffing Association Index, which is revised more regularly, shows that staffing jobs increased by 2% in the second whole week of October compared to the previous week. The ASA reports that this is the highest week-to-week rise for the comparative week since the index’s inception in 2006. Also, new starts have increased for the fifth week in a row, and nearly half of staffing firms are gaining new weekly assignments.

In short, as we reach the peak holiday hiring season, the industry is steadily picking up momentum. Companies are observing the COVID-19 pandemic, affecting their ability to recruit and retain full-time staff. As a result, they will likely rely on temporary support from staffing agencies more than ever before to help them manage this prolonged period of uncertainty.

2.Covid impact on the technology industry

Many tech conferences have been canceled due to the spread of this deadly virus. Which could have been a perfect opportunity for many businesses to broaden their horizons by collaboration.

A few meetings were rescheduled as teleconferences, but this won’t have the same effect, and conference attendees won’t be able to network as much as they would if they were in attendance. The cancellation of these significant-tech conferences is expected to result in a loss of $1 billion. 

Despite this, the IT industry is projected to grow steadily, from US$ 131 billion in 2020 to US$ 295 billion in the next five years by 2025, relative to many other industries. The increased demand for software and social media platforms such as Google Hangouts, WhatsApp Video Call, Zoom, and Microsoft Teams is the primary reason for its growth.

These teleconferencing resources enable people in quarantine to keep in contact with their loved ones while still holding conference calls and working. The economy will flourish due to people’s recognition of the role of the internet and technology in keeping us healthy and facilitating contact between doctors and the general public during these crises.

3.Covid impact pharma industry

The pharmaceutical industry is likely to be the only growth industry in 2020 (As of December 18, 2020). Overall, almost all industries have been hard-hit by the consequences of the corona crisis and will probably take a long time to recover.

 A study by the management consultancy and the Bank Intesa Sanpaolo from the end of May only sees the pharmaceutical industry with growth prospects in 2020. The manufacturing industry will lose at least 15 percent of its sales in 2020 before, in the best-case scenario, it could grow 5.3 percent again in 2021 and around 3 percent in each of the following two years. Production rose again in July and August without even coming close to the previous year’s figures.

 COVID-19 may be viewed as a once-in-a-century opportunity for the pharmaceutical industry, as it enhances the demand for prescription medications, vaccines, and medical devices. This is one of the most visible short-term effects of the COVID-19 outbreak, but it has short and long-term consequences. 

Increased hospitalization, the prevalence of COVID-19-related pneumonia, and the demand for placing patients on ventilators all lead to prescription drug shortages. A medication shortage is characterized as a “supply problem that affects how a pharmacy prepares or dispenses a drug product or has an impact on patient care when prescribers must use an alternate agent.”

Many regulatory authorities worldwide have released a verified shortage list, which mainly includes possible COVID-19 therapies and related pneumonia.

4.Covid impact on to healthcare industry

Companies that manufacture diagnostic tests to relieve its symptoms would, unsurprisingly, benefit from increased healthcare expenditure linked to COVID-19.

Companies that succeed in producing a COVID-19 vaccine (e.g., Modern Therapeutics) are likely to see a rise in income in the future as governments worldwide raise investment to avoid a pandemic recurrence.

Healthcare businesses that aren’t affected explicitly by COVID-19, such as those that don’t make hospital beds, protective equipment, or infrastructure help, are likely to face industry disruptions similar to those experienced by other industries affected by the pandemic.

 Advanced practice providers (nurse practitioners, physician assistants) were a steadily rising part of the provider workforce before the pandemic. They were gradually recognized as independent primary and specialty care providers.

 5.Covid impact on global retail industry

In all of the OECD countries, the retail sector is extremely critical. It accounts for nearly 5% of GDP and employs approximately 1 in every 12 people, acting as a conduit for customers from upstream industries. The retail industry has been rocked by COVID-19, with shock levels varying dramatically between brick-and-mortar and online retailers, essential versus nonessential stores, and small versus large businesses.

Due to a variety of reasons, retailing has a major overall effect. The retail sector is a major economic force: it employs roughly 1 in every 12 people in OECD economies and accounts for nearly 5% of GDP. Furthermore, since it primarily serves final demand, it plays an important role in supply chains as both a supplier of products to households and an outlet for surplus goods. 

Furthermore, since the retail industry employs many people, any disruptions have a disproportionately negative impact on jobs. The sector also depends on low-wage, part-time jobs, on-call and gig workers. Who aren’t protected by conventional social security policies, exacerbating the social implications of the industry.

6.Agriculture industry covid impact

The COVID-19 pandemic is a global health epidemic that is already wreaking havoc on the global economy, both directly and indirectly, due to the disease’s rapid spread. The food and agriculture industries are also feeling the effects.

Although food supplies have held up well so far, the measures put in place to curb the virus’s spread are beginning to interrupt the supply of agro-food products to markets and customers, both within and across national borders, in many countries. The sector’s structure and – for certain commodities – the demand level is also undergoing significant changes.

While the pandemic raises some crucial problems for the food system, it also presents an opportunity to accelerate developments in the food and agriculture industry to strengthen its sustainability in the face of various threats, including climate change. 

 The supply of staple crops is abundant, production prospects are promising, and cereal stocks are expected to hit their third-highest level ever. Furthermore, most countries have declared the agriculture and agri-food sector important, exempting it from business closures and movement restrictions. 

7.Manufacturing industry impact covid 19

The COVID-19 pandemic has already presented several challenges for US industrial manufacturers, especially those that rely on employees who cannot perform their jobs remotely. According to a recent report conducted by the National Association of Manufacturers, approximately 80% of manufacturers believe the pandemic would have an economic impact on their business (NAM). 

According to CFO responses to a recent PwC survey, this is significantly higher than the 48% of cross-industry companies concerned about the same effect.

The manufacturing sector in the United States, which employs about 13 million people, is likely to be hard hit by this outbreak for two reasons: Many manufacturing jobs are conducted on-site and cannot be done remotely. Second, sluggish economic growth has reduced demand for industrial goods in the United States and worldwide. 

8.Covid impact on the solar industry

The coronavirus pandemic’s effect was mitigated by favorable economics, friendly policies, and strong demand in the second half of the year, resulting in a record high for solar installations in the United States in 2020.

According to a study by the Solar Energy Industries Association and Wood Mackenzie, installations increased by 43% year over year, hitting a new high of 19.2 gigawatts of new power. 

The United States added just over 8 GW of power in the fourth quarter alone, a quarterly high. That’s more power than was added in the entire year of 2015, which was 7.5 GW. A gigawatt of energy is enough to power around 190,000 households. According to SEIA, the United States currently has 97.2 GW of total solar capacity installed to power approximately 17.7 million households. 

For the second year in, a decade California, Texas, and Florida were the top three states in annual solar additions. The top five in Virginia and North Carolina. Following a slowdown in the second quarter as the pandemic ground operations came to a halt, residential solar additions saw a record-setting sales pipeline in the second half of the year. Customers who were interested in solar power increased profits. 

9.Covid impact on the dairy industry

Prime Minister Justin Trudeau stated the government’s intention to amend the Canadian Dairy Commission Act and increase the CDC’s borrowing limit by $200 million, enabling cheese and butter to be temporarily stored and avoided waste. Parliament adopted these amendments today, raising the CDC’s borrowing limit from $300 million to $500 million.

Many dairy products have seen significant increases in demand as a result of the COVID-19 pandemic. Dairy farmers, sadly, have no choice but to waste some of their milk.

Stakeholders from across the dairy supply chain partner with provincial marketing boards to ensure that Canadians continue to have access to a diverse range of dairy products as temporary production reductions are enforced.

The CDC is a critical regulator in our supply management system, enabling the dairy industry to balance supply and demand. The CDC would be able to buy and store more butter and cheese if its borrowing ability is expanded. These reforms will work in tandem with existing CDC initiatives to help the dairy industry handle excess milk while also providing critical support to keep the supply chain running smoothly.

10.Advertising industry covid impact

Even though the virus’s prevalence, online search has recovered, and eMarketer now anticipates a 5.9% rise in search ad expenditure this year. They understand that the pandemic has permanently altered people’s shopping habits. Although their current forecast for search spending in 2020 and 2021 is smaller than expected before the pandemic, their latest forecast for search spending in 2022 to 2024 now exceeds their pre-pandemic expectations.

Advertisers are forecast to spend $99.22 billion on a quest in 2024, up from $91.32 billion previously estimated. The telecoms industry in the United States is one of the country’s biggest advertisers, having invested $12.49 billion on digital ads alone in 2019. This accounted for 9.4% of overall digital ad spending.

Even though the pandemic, eMarketer expects $13.99 billion in telecom investment in the United States in 2020. (a 12 percent increase, 10.4 percent of total digital ad spending.) They are expected to increase their ads even further next year, with spending expected to grow by another 23.0% to $17.21 billion, accounting for 10.6% of overall digital ad spending.

11.Covid impact on consulting industry

Despite the economic downturn, management consulting remains an “important” commodity for large companies. Consulting companies were enlisted to help businesses maintain cash flow, reduce cash burn, reorienting supply chains, digitizing operations, and other activities.

Furthermore, governments worldwide enlisted the aid of consulting firms to build COVID prevention and economic reopening strategies. Because of these and other factors, Management Consulted remains optimistic about the industry as a whole and predicts continued strong growth in 2021.

Although demand for some consulting services exploded in 2020, existing companies reaped the benefits in a big way. M&A operation remained brisk, and several consulting firms merged their core market offerings. 

12.Restaurant industry impact covid

The 2021 State of the Restaurant Industry study from the National Restaurant Association explores the devastating effect of COVID-19 on the restaurant industry, tracks the changing operating environment, and captures customer perception, influences, and intentions for the coming months.

It also looks at how the pandemic forced restaurateurs to pivot and change in many key areas, such as rapidly embracing contactless technology, moving many services to off-premises, outdoor dining, changing labor levels and menus. 

The study by the National Restaurant Association provides effective data on sales and traffic, operating patterns, food and menu trends, and employee trends, as well as customer purchasing preferences and intentions, based on responses to the Association’s survey of 6,000 restaurant operators across all market segments and a survey of 1,000 adult consumers.

13.Semiconductor industry covid 19 impact

People worldwide have been experimenting with new ways of working, learning, and communicating through videoconferencing and other technologies in recent months. Such developments have the potential to have a long-term effect on semiconductor demand and open up new opportunities for established products and services. Around 2020 and 2025, the global semiconductor manufacturing equipment market is projected to rise at a CAGR of 9%, from USD 67.4 billion in 2019 to USD 95.9 billion in 2025. 

The market has a significant growth prospect due to various reasons. This includes the rising need for electric and hybrid vehicles. Which increased investments in R&D facilities as a result of COVID-19’s effect, growing consumer electronics market, and an increasing number of foundries as a result of COVID-19’s impact.

 14.Cannabis industry covid impact

Communities around the country remain worried about coronavirus’s danger, the cannabis industry appears to be booming. Cannabis companies were recognized as “key enterprises” by state and local governments in 2020, resulting in record sales.

In addition to smashing sales records, congressional support and praise for the cannabis industry’s efforts to combat the spread of the novel coronavirus have confirmed one thing: the cannabis industry is having a moment.

After the state, governments, and public health officials declared cannabis companies to be “key” operations. Marijuana companies are still listed as an “important commodity” in almost all states with legal medical or recreational markets, enabling them to stay open even as much of the retail industry has had to close or operate with extreme restrictions.

Cannabis dispensaries saw a significant increase in sales and new customers. Dispensaries showed total revenues rise by 30% in one week during March 17 (essentially the first week of extreme shutdowns). In addition to increased sales, cannabis retail stores saw an increase in new customers, the amount each customer spent in a single visit, and the number of employees. 

15.Covid impact on the fitness industry

When the COVID-19 pandemic struck, and at-home workouts became the standard, many people who still wanted the community class experience switched to virtual wellness in the form of live and pre-recorded lessons.

Although virtual workouts were available before the COVID-19 pandemic, their popularity has skyrocketed. Since March of 2020, user access to virtual content has increased dramatically, according to Mindbody data. Pre-recorded content is used by 73 percent of consumers, compared to 17 percent in 2019, and live stream lessons are used by 85 percent of consumers weekly, compared to 7 percent in 2019.

The first effects of the corona crisis on the fitness industry have made themselves felt. During the lockdown phase (March 16 to June 8, 2020) 74 percent fewer new contracts were signed and almost 14 percent more terminations were received than in the same period of the previous year. On the positive side, however, the number of new contracts rose again in June. This is the result of a study by the Sport Alliance, in which 1,878 fitness studios were analyzed.

References

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BCcampus

BIGCOMMERCE

Frontiersin

MDPI

IZA.org

OECD

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