The global spread of coronavirus disease, which is caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), has been scaling up concerns among governments across many countries as they continue to struggle to flatten the exponential growth curve despite imposing lockdowns and enforcing stringent social distancing regulations. The figure given below shows the spread trend:
Clearly, the pandemic has not peaked yet while the number of deaths reported to the WHO has already crossed 274,488 (as at 6:37 pm CEST, 10 May, 2020). Since extensive social distancing is not being practiced in most of the countries, the time-to-peak for the pandemic is still uncertain. On the other front, the slump in global economic growth is weakening many countries’ efforts to fight the virus. Countrywide lockdowns, which include restrictions on movement of people and on economic activities across sectors, might translate into a shrink of around 1% in the global GDP for the year 2020 (Source: The United Nations) if they continue throughout the second quarter. The GDP could shrink further if the restrictions pertaining to economic activities extend till third quarter and if the fiscal responses prove ineffective in supporting income and consumer spending. Rising unemployment across the globe is transforming shocks on the supply side to higher-intensity shocks on the demand side. Since this, if continues, could push a significant proportion of global population into poverty and worsen already high levels of income inequality across countries, governments are planning on easing lockdown restrictions in order to restore economic growth by allowing industrial activity. However, very high risk of increase in rate of disease spread associated with this move remains a big concern for the governments, and thus, has been pushing them to catalyse the process of drug discovery and development. Although the Food and Drug Administration (FDA) has already issued emergency use authorizations for hydroxychloroquine sulfate, chloroquine phosphate and for the investigational antiviral remdesivir by Gilead Science, Inc., there are no FDA-approved drugs or vaccines for COVID-19 in the market. With support from governments, companies are making huge investments into research and development in order to gain competitive advantage in this race for drug development. Since some research in immunology indicates towards the possibility of a vaccine for COVID-19 already in existence, many research universities and clinical centers across the globe are focusing their efforts to test the efficacy of candidates. Bacillus Calmette–Guérin, a live tuberculosis vaccine which has been in use for around 100 years, is one such candidate, and is gaining researchers’ attention as they believe this vaccine could prove effective in minimizing the risk of contracting the coronavirus disease. O.P.V, a vaccine for polio, is also being tested as a potential vaccine for fighting COVID-19 pandemic. Although this theory sounds counterintuitive, as these vaccines were developed to protect against an entirely different pathogen, and this is not how vaccines are believed to work, researchers’ understanding of innate immunity, an arm of immunology, makes these vaccines potential candidates in this race. Apart from these vaccines, more than 100 candidates are at various stages of development across laboratories worldwide. Pfizer Inc., for instance, is working with BioNTech SE on four vaccine candidates, each of which represents a different mRNA format and target antigen. While two of these vaccine candidates use a nucleoside modified mRNA (modRNA), the third and the fourth candidate leverages a uridine containing mRNA (uRNA) and a self-amplifying mRNA (saRNA) respectively. After starting phase 1/2 clinical trial in Germany, the companies have started Phase 1/2 trials in the United States as well. Novel approach of these companies, which allows them to assess different mRNA candidates simultaneously, and determine the safest and most effective candidate for COVID-19, has made them one of the few frontrunners in this race for cure. Moderna, Inc., another biotechnology company based in the United States, also has a promising vaccine in development. In April, 2020, the company snared a US$483 million funding from the U.S. government which was aimed at catalysing the process of drug development for COVID-19. The company has received approval from the FDA to begin phase 2 clinical trials for its vaccine candidate and has plans to start phase 3 trials very soon. Although Sinovac Biotech is struggling to find subjects to conduct phase 1 and phase 2 trials on, since China managed to contain the spread while development of this vaccine was still at phase 1, it is in talks with the WHO and regulators in many countries to get approval for conducting clinical trial in countries with rising number of cases, and is thus another leading player with a promising vaccine in pipeline.
However, despite combined and focused efforts by many companies and governments, aimed at catalysing the process of drug development, a cure is somewhat unlikely to enter the market in the very near future. Yet, some vaccine candidates have better chances of early entry into the market than many others. Oxford University, for instance, seems to be leveraging the head start it got by already having a vaccine candidate at hand. Since researchers at the Oxford University were working on vaccine for Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS), the cause of which is also coronavirus, they started evolving the technique and started development of vaccine for COVID-19 at the very first hint of the pandemic. Although this is far from certain, it is plausible that their vaccine can become available by as early as September, 2020. At another front, development of antidote for coronavirus is also gaining momentum. Israel Institute for Biological Research (IIBR), for instance, in a significant breakthrough, has developed a monoclonal neutralising antibody which can neutralize the SARS-CoV-2 inside carrier’s body. According to a statement from Israel’s defence minister, IIBR is working towards getting the formula patented, which will be followed by its mass production. Although duration of this pandemic is uncertain and so is the degree of impact it would have had on lives and economy by the time it gets eradicated, such breakthroughs give a positive outlook of the sectors like cellular or molecular biology and biochemistry among others.
About the Author:
Dhiraj Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence.
The spread of novel coronavirus (COVID-19) across the globe continues to gain momentum despite combined and focused efforts by governments and political organizations. Although some countries have started witnessing a drop in the daily number of new cases, flattening the curve of this pandemic still remains a global challenge. According to a data from the World Health Organization (WHO), the total number of confirmed COVID-19 cases (as on 2:00 am CEST, May 1, 2020) stood at 3,145,407, with around 221,823 deaths reported. Europe and Americas account for the largest share of the burden as the number of cases in these regions crosses 1,434,649 and 1,291,917 respectively. Where on one hand, countries like Iran, Spain, New Zealand, and Australia are moving towards easing of lockdown restrictions, as part of their plan to restore economic growth after achieving remarkable success in flattening and pulling down the curve, other countries on the other hand are still struggling to fight the pandemic and minimize losses associated with it.According to the CDC (Centers for Disease Control and Prevention), the aftermath of COVID-19 outbreak is expected to last in the U.S. for a fairly long time as many people in the country will remain vulnerable and may get exposed to this virus either this year or over the next year.
The impact of this pandemic is not confined just to the people, who continue to face hardships due to a blow on their source(s) of earning, since industrial growth across the globe is witnessing a slump which might take them a couple of years to recoup from. Although countrywide lockdowns and self-isolation rules by the governments have disrupted the industrial activity across all countries, the global travel and tourism industry has totally decimated by this pandemic outbreak. Hotels, restaurants, and airline companies have witnessed a drastic decline in their revenues, leading to a huge number of layoffs. According to the International Air Transport Association (IATA), an estimated 1.1 million flight cancellations are predicted by June 30, 2020 with the total loss in passenger revenue expected to total to $252 billion for this year.
Another industry that has faced a severe disruption is the already declining automotive industry. Nationwide lockdowns have made it difficult for automakers to continue production as this does not align well with governments’ guidelines associated with maintaining social distancing. Since a major share of the global automobile manufacturing heavily or solely relies on China for auto parts, global supply chain disruption, owing to this pandemic, has forced these companies to halt their production. In March, 2020, global auto giants- General Motors, Ford, and Fiat Chrysler- temporarily closed down their U.S. facilities as part of their effort to prevent the spread of the novel coronavirus and plan on resuming some part of their manufacturing at their U.S.-based facilities by May 18. However, Daimler and Merced-Benz are some of the automakers which have already resumed activity at some of their plants with limited number of workers. Since governments continue to remain intolerant towards non-compliance with social-distancing and sanitization directives issued by them, these automakers are adopting stricter new protocols, which include mandatory wearing of face masks and temperature checks at entry gates, in order to comply with such directives and reduce the spread of the virus.
As the impact of this pandemic on these industries continues to scale up, other industrial sectors aligned to these industries, and to resources whose availability has been affected by the virus outbreak, are also taking the fall due to what is called a domino effect. According to the International Energy Agency’s latest oil market forecast, global oil demand is projected to decline in 2020, with expected fall to around 90,000 barrels a day as compared to the last year, as this pandemic has constricted travel and global economic activity.
While other economies are also facing repercussions of the virus, the impact of COVID-19 on China’s economy will have a major impact on the global oil and gas industry. Since China accounted for more than 80% of the global oil demand in 2019, deep contraction in the country’s oil consumption, coupled with major disruptions in the global travel and trade, are driving down the growth of the oil and gas industry. Restrictions on the movement of people and goods within countries, due to lockdowns imposed by the governments, have dramatically reduced the demand for transport fuels. In conjunction to this, very low demand for jet fuel, majorly attributed to a halt on civil aviation sector, is also affecting the global oil and gas industry. Since the time it would take the governments to mitigate this virus is still uncertain, the outlook of the global economy over the short and medium term remains shady. Although huge debts being taken by many countries, in order to fight this pandemic and revive their industrial sectors thereafter, might look like a part of a good revival plan in the short term, very high debt to GDP ratio might pose other severe threats over the period.
About the Author:
Anjali Joshi is a Senior Research Analyst at Knowledge Sourcing Intelligence.
The COVID19 outbreak was declared as a Public Health Emergency of International Concern on 30 January 2020 and later on March 11th, 2020, The World Health Organization declared COVID-19 a pandemic causing an immense impact on the lives of people and the business and markets around the globe. Recently the total number of coronavirus cases crossed the 2 million mark globally, with the death count at more than 128,000, and these figures are expected to rise further. The good news is that the rate of recovery is improving and the coronavirus curve seems to be flattening aided by some strict measures by federal governments. As the countries across the globe continue to tackle the coronavirus (COVID – 19) pandemic, the businesses and stock market are facing an unprecedented situation. The effect of COVID 19 on the major countries has been boundless and with the forced lockdowns and low consumer confidence, the businesses are facing a huge task to remain operational while meeting their costs. Recently the International Monetary Fund has already suggested that the world has entered into a recession which would be far worse than the 2008 financial crises, and most of the major economies will be facing their biggest challenges in the year ahead.
However, though there are millions of businesses and individuals who are under the risk of financial crises, but there are some parts of the industry that are benefited from the changes forced on society in the recent time. Let’s discuss some of them.
Video Communication Platforms
Businesses and educational institutes in the various parts of the world are responding to the current pandemic by implementing travel restrictions and work from home and remote (online) learning policies. To secure business activity during the time of crises, companies are using easy to use communication tools to enable remote work and learning and video conferencing and group chat software are widely adopted. In other words, COVID-19 is expected to have a significant impact on how companies or organizations view remote work. Even, guidelines are also being laid out by health and government authorities to mandate work from home. Major giants are investing heavily to take the competitive edge in the e-learning market. Also, communication technology players like Zoom and Microsoft are witnessing a substantial increase in the level of subscription in recent times. For instance, Microsoft reported that its Teams added nearly 12 million new users as remote workers increases during the pandemic. Also, the company recently launched a comprehensive COVID-19 resource to provide updated, cross-company information. Further, UNICEF and Microsoft launched a global learning platform to help and address the COVID-19 crisis.
Education institutions like colleges and universities are shut down globally as they are at a higher risk of spreading the disease due to the dense student population. In response to it, institutions are converting in-person curriculums into online courses and publish it in virtual classroom solutions which are allowing million of students to continue their education and learning from home. Video conferencing based remote learning helps in keeping the student engaged with features like annotation, break out rooms, and even group chats among others. Many universities are already leveraging video conferencing as one of the key elements of their educational system. For instance, Arizona State University (ASU), tests video conference in March 2020 and held nearly 170 classes with more than seven thousand students using Zoom. Also, the University of Bologna, switched nearly 90% of its courses to online using Microsoft Teams for its 80,000 students. As a result of such initiative, the subscription in online platforms is out breaking leading to a high risk of data security. As the world is focussing on the health and economic threats posed by COVID-19, cyber criminals around the world undoubtedly are capitalizing on this crisis, and not only businesses are being targeted but end-users are also being tricked, which is expected to boost the investment on cybersecurity by IT companies.
Today the use of mobile phones has made accessing social media, movies, and games a lot easier, the sheer variety of new games are online platforms have ensured that the people won’t run out of options during the lockdown period. Online media service provider companies like Netflix Inc. is now becoming even more important in the daily lives of people forced to stay at home and in front of their televisions. The rising interests and popularity in the video game industry and the increasing awareness about e-Sports will be the major driving factors of the e-Sports market. Also, many online multiplayer games such as PUBG, Call of Duty Mobile, and Counter-Strike have social media elements where players are enabled with the option to chat and team up with others. As a result, mobile-based online gaming platforms around the globe are reporting an exponential jump in its user base in March 2020. Also, the budding investments and the introduction of high prize pools of such tournaments will draw more participation, thus boosting the demand for this market.
Online Grocery and Food Delivery
Traditional industries such as manufacturing and travel & tourism have suffered immense losses from the shutdown policies around the globe. Such policies have indirectly benefitted online services, as mandatory isolation, restriction in movements have forced people to stay at home. During such time going to the offline distribution channel such as supermarkets, hyper marts seemed full of risk which is driving the growth of the online grocery shopping market. In addition, due to the closure of restaurant dine-in services in various parts of the world to avoid social gathering, online food ordering is now becoming a crucial business model for many players. As a result, online food delivery is widely adopted and players are now collaborating with manufacturing giants to deliver necessary products to its customers. For instance, in India, Domino’s Pizza partnered with ITC to deliver essential commodities such as wheat and spices to customers during the lockdown period. Also, Uber, BigBasket, and Flipkart partnered to deliver everyday essentials to people amid the ongoing COVID-19 lockdown.
About the Author:
Rajat Sudan is a Market Research Analyst at Knowledge Sourcing Intelligence, working on estimates and global/regional specific reports on multiple industries ranging from agriculture to semiconductor, with a special knack for packaging and ICT. With the addition of his formal education in Economics, Mathematics, and Finance, he is able to provide more light on the macro aspects of the story. To read more articles by him, and for more information regarding multiple global markets, Fill out the contact form for more details.
The total number of coronavirus cases crossed 2 million mark today, with the death count standing at 126,776. The good news is that the rate of recovery is improving and the curve seems to be flattening aided by some strict measures by federal governments. As the countries across the globe continue to tackle the coronavirus (COVID – 19) pandemic, the businesses are facing unprecedented situation. Concerns over fixed cost, employee retention, optimizing operational cost, and focus on revenue maximization despite the uncertainty over existing deals and contracts are some of the major issues that businesses across the globe are trying to mitigate. From forced lockdowns, to suspension of air and land travel, and movement restrictions, to policies enabling greater use of face masks. The fiscal stimulus and revival package continues to maintain some stability, but it may have an impact only in short term.
For some of the major economies such as the U.S., and United Kingdom the COVID infection curve still remains far from flattening, while India with a huge population seems to be doing better than most of the western counterparts aided by early screening and strict lockdown measures. Germany, Spain and Italy continue to remain the European hotspots for the coronavirus infection, while Middle Eastern region seem to be better placed though major economies are facing onslaught from declining oil prices which have declined to $19.81 as of April 14th 2020 from a high of $63.87 on 17th April 2019.
The chart below shows the total infections over the last one week in some of the biggest economies across the world. The U.S. which has recorded the most number of cases worldwide is still following the same trajectory. The situation in New York is worrisome with the state accounting for close to 33% of the total cases recorded in the country, though the tough measures with respect to social distancing and more tests seem to be working. As per the Governor Andrew Cuomo, the hospitalizations and deaths have both declined. It is imperative that the trend is sustained to ensure the curve has started flattening. The week also brought back focus on hydroxychloroquine, which has been touted as one of the treatment for COVID symptoms, with NIH conducting clinical trials. Big pharma companies and researchers are working towards the vaccine, but most of the estimates are expecting a timeframe of 12-18 months before it is available for widespread treatment.
Moving to Europe, Spain, Italy and France are worst hit by the pandemic accounting for 25% of the total number of cases of the total infections recorded in the top 5 countries. Italy has now recorded more than 21 thousand deaths, followed by Spain with 18,255 deaths, and France with more than 143 thousand cases and 15 thousand deaths. The UK is yet to reach peak with daily deaths and number of new infections seemingly increasing. The country has more than 81 thousand active cases as of April 14th 2020, and has recorded 12,107 deaths.
The Asia Pacific countries have been performing better as compared to the western economies. China has recovered with daily new cases being recorded in double-digits. Wuhan restrictions have been lifted and as per the reports, most of the city is now buzzing with economic activity. South Korea is continuing with the central policy of testing to identify the quantum of infection. Japan’s Prime Minister Shinzo Abe declared emergency for a month due to the measures being adopted so far were insufficient to control the infections. India, which has been relatively doing well due to early screening and complete lockdown is also witnessing the infections doubling rate reducing to 4.1 days from the earlier 7 days. The Prime Minister announced the existing lockdown to extend from 14th April 2020 to 3rd May 2020, with relaxations after 20th April 2020 for the areas which have been identified as COVID free zones.
The effect of COVID 19 on the major economies has been enormous. With forced lockdowns and low consumer confidence, the businesses are facing huge uphill task to remain operational while meeting their fixed costs. The IMF has already suggested that world has entered into recession which would be worst since the depression, and most of the major economies will be facing their biggest challenges in the year ahead. The table below represents the IMF GDP growth forecast for the major economies for the year 2020 as compared to the previous year.
The impact of the pandemic in conjunction with the GDP forecast, let’s analyze some major industries. Even though the world economy is expected to rebound next year, the shockwave due to the slowdown is going to be huge.
Manufacturing and Construction
The global slowdown is going to have a significant impact on the manufacturing industry. China being the global manufacturing hub has slowed with global companies cutting down or cancelling the existing orders. The companies are also looking for other avenues or shifting the production facilities out of the country due to the country being the focal point of the virus pandemic. The fixed cost remains high and the uncertainty in the global markets would continue to affect the industry over the 1st half of the next year. The large bailouts and stimulus packages will affect the spending in the construction sector. The industry has been facing challenges and with job losses and shrinking bank credit, the revival seems difficult in the short-term.
Communication and Technology
The demand for consumer electronics will remain slow with contracting supply chains. The revival depends on the economic improvement which seems to be low for the consumer confidence to pick-up. The replacement of existing products would remain stagnant. The new product launches would take time to reach the 2019 levels, as the companies would focus on strengthening the existing position in the times of uncertainty. The extension of lockdowns, WFH policies and the need for entertainment is creating the need for managing a large chunk of data, driven by need for storage requirements. The data center industry will continue to maintain the momentum but the demand for new data centers will be hampered by the shrinking IT budgets and low expenditure outlook.
The impact of COVID on retail industry is bare minimum as most of the essential items are sold through both online and offline retailers. Most of the countries into lockdown have allowed the online retail stores to continue remain open, the brick and mortar stores are being allowed to operate if they are following social distancing parameters. The e-commerce channel would continue to drive the momentum of the retail sales.
Advanced technologies such as 3D printing, nanotech and next generation imaging should remain robust. The FDA approved a 3D printed mask design and the immediate focus is on ramping up the PPE production to assist the first line responders. The adoption of nanotech should remain stable driven by the research and development to identify the potential of the technology for a wide range of applications. The healthcare sector should continue to witness product launches and advanced imaging solutions.
The rising novel coronavirus pandemic has affected the world on a societal as well economic front. Governments across the globe are trying to deal with the challenges that this struggle has brought with it. As per the latest numbers by John Hopkins University, which is tracking the coronavirus cases across the globe, over 1.3 million positive cases have been reported by the 7th of April 2020 with 78,269 causalities. 292,467 people globally have recovered from the disease as of now. The pandemic which is reported to have been originated in the Chinese city of Wuhan has spread to 211 countries across the globe as reported by the World Health Organization.
Source: Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU)
As can be seen in the snapshot below, the United States is the worst affected region in terms of number of cases, with positive cases in the region climbing to 368,449 till date. While, the European region has become a hotspot for the disease. Major economies in the region such as Italy, Spain, Germany, and the United Kingdom appear to be the most affected. Italy has suffered the highest deaths with the death count at 16,253 which is majorly being attributed to a high geriatric population as the disease seems to worst affect the elderly population having a weaker immune system as compared to the younger population. Although, the country is now reporting a lower number of new cases every day. On the other hand, Spain is also witnessing a high number of new cases with more than 5,000 new cases reported in the last 24 hours. The country is also witnessing a high death toll with 13,798 reported deaths till 7th April 2020. The daily death count increased to 743 on 6th April 2020 after the country reported a decrease in deaths for 4 consecutive days.
Source: Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU)
The United Kingdom which appeared to be less affected as compared to its other European counterparts has witnessed a sudden rise in the number of cases in the last 10 days from 29th march till 7th April 2020 with new cases increasing at an alarming rate with each passing day. The country reported 621 deaths in the last 24 hours. Boris Johnson, the British Prime Minister who himself has been tested positive for COVID-19 and has been transferred to intensive care, has vowed to ramp up testing to tackle the pandemic.
Japan, another nation which is witnessing a steady rise in the number of positive COVID-19 cases, declared a state of emergency targeting the country capital Tokyo and 6 other prefectures after the city witnessed a sudden surge in positive coronavirus cases.
While the US, France, and UK and few other major affected countries are still reporting increase in the number of cases every day, latest numbers from some regions specifically Italy, Spain, Iran, and Germany which seemed to be the most affected offer some hope. Going by the latest reports as on 7th April 2020, all these countries have reported a dip in the number of new cases in the last 5 days. Though it is still early to make a judgement and a high number of new cases are being reported every day, the decline in the number of new cases in these European nations provide a ray of hope to the other parts of the world dealing with this pandemic.
A major term being used in this time is “flattening the curve” which basically refers to reducing the number of new cases with each passing day. A decline in the number of new cases from the previous day will be represented on a trend line as the name itself “flat”. On a column chart it will be represented by a downward trend. Countries are working towards flattening this curve and some have started succeeding with China leading by example, and similar trends being observed in South Korea, Italy, Spain, and Iran providing encouraging signs to the rest of the world.
Daily confirmed new COVID-19 cases (5-day moving average)
Outbreak evolution for the current 10 most affected countries
Source: Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU)
Countries across the globe are implementing total and partial lockdowns, state curfews, mass testing, and travel bans to deal with this global issue. The novel coronavirus along with the threat that it has brought with itself to the human population has also given rise to other major problems such as threat to economies and livelihood of a large part of the global population. Economies across the globe have started witnessing slowdown and major organizations such as the UN, WHO, and World Bank fearing the worst is yet to come. The United Nations recently in a trade report analyzed that the entire world economy is facing a threat of recession with the two likely exceptions: India and China. Top economists believe the world has already entered into recession and a latest poll by Reuters between the16th and 19th of March 2020 which saw a response from 41 economies also opined the same.
The pandemic has affected almost all industry sectors with travel and tourism being one of the worst affected. As various regions are witnessing mass lockdowns the manufacturing sector has also taken a hit with companies operating at minimum capacity and focusing on essential goods right now. Although various sectors have been affected by this global crisis, the food and beverage, healthcare, and agriculture sectors are witnessing a high demand being the essential components to support the need of the large global population.
Among this crisis, major economies as well as other parts of the world have particularly struggled in dealing with the high demand for hospital supplies needed to attend to a large patient count. Many countries have reported shortage of medical supplies and equipment which is leading to high death toll and is proving to be a major obstacle in dealing with this pandemic. The World Health Organization as per March 1st 2020 has already shipped nearly half a million sets of protective equipment to 47 countries. The United States government has witnessed a shortage of medical supplies in dealing with the exponentially rising number of coronavirus cases in the country. President Donald Trump on March 18th, 2020 stated that his government will invoke Defense Protection Act that will give the Federal Government sweeping power to ramp manufacturing capacity keeping in view the shortage of hospital supplies as suggested by the healthcare experts. This move will help the government to force private companies to manufacture specific products that can help the government to deal with this nationwide crisis.
Other regions across the globe are taking hep from medical experts along with importing medical supplies to help their medical staff stay safe while taking care of the patients. Furthermore, protective gears such as masks and hand sanitizers are being supplied to common people to curb the spread of the disease.
Most studies suggest that the nearest vaccines for the disease are atleast 12 to 18 months away. Social and economic impact are yet to be assessed. Though it is believed it might take another year for the world to completely recover on a health as well as economic front. While it is still too early to predict the long term impact that this pandemic will have on the world, social distancing, mass testing and adhering to government, WHO, and healthcare organization guidelines seem to be the safest bet to tackle the present situation in order to contain the virus and minimizing its long term impact.