Impact of COVID-19 on the economy
Impact of COVID-19 on the economy
I don’t think , we have even begun to see the impact of the economic effects of the Coronavirus. they will only grow as time goes on.
supply chain disturbed.
The supply chain beginning in China temporarily disrupted. Those impacts, which began in February, will take about three months to be felt here in the US. That puts the first pain in May, even if the virus disappears by then. For somethings, like washing machines and furniture,
it may not be so incredibly bad as those purchases are non-perishable. But if you are a store that sells “N” units of those products and you can no longer get them, then you’re next step is to cut back on the labor you don’t need to sell, deliver, install, and maintain the product. And that’s just for non-critical items.
all canceled impact of covid-19 in economy
Now we are seeing all kinds of sporting events and meetings canceled. I am no arguing the need, just the impacts. The normal NBA game makes between 6 and 8 million dollars for the teams. this does not count the money made by concessionaires, parking valets, nearby bars and restaurants, gas stations, and so forth.. Many companies survive because of “game night”.
impact of covid-19 in economy
What happens when there is no more “game night”? All those retailers and service providers get less money. they buy less beer and spirits and foods, even the laundry services who wash the tablecloths in restaurants get less business.
View the closing of Disney World in Florida. The entire area around Orlando is certainly counting on the tack-on result from that entertainment park, from token sales to hotel rooms to parasailing, to drink to airline tickets and food and so on. What happens when that stops coming? First of all, it’s hard to stop all the ‘just-in-time’ purchases; someone has to eat that, so not only is income lost but a lot of food will just go bad
there may be stockpiles of juice and other goods , that cannot be stored and returned to the merchant who must carry it. But the seller who loses revenue, especially in establishments which work on low borders, could be the death knell. It certainly will cause ends
it will mean the firing of service people like servers and bar backs and heavy lifters and so forth. You can’t keep people on if there is no revenue coming in , and Labor is almost always your Number One Price. How do you keep paying the rent on your restaurant in the tony part of the city, near the stadium if no one buys your overpriced steak and suds?
And that trial ended in less than a week. How much will companies suffer by schools being closed, businesses closed, reception venues closed for weeks on end?
While some people divine. this is a six-week trial at most, likely, the virus will just be reaching its height in six weeks, not spending. The more people stay home, fearful of contracting the virus. companies will go belly-up from lost sales, people will be laid off; the more the economic engine slows. We have many empty ships meeting in San Diego with no loads to or from Asia.
The last time we saw this was in 2008. The US economy was already on the precipice before the Coronavirus hit; the Cass Freight Index showed that cross-country shipments of goods were down almost 10 percent versus the previous year. Since the virus, FedEx and UPS have suffered extreme slowdowns in shipments and at an increasing pace.
The problem will be further exacerbated . when the impacts of the virus pass, because there will be a bottleneck in transport and delivery; the US was already nearing capacity on intermodal and truck transport of goods.
There is already a massive shortage of transcontinental truck drivers to deliver goods and air freight will not only be limited but exorbitantly expensive. We should expect shortages of everything that sources a component from far away, like Asia, at least through the summer.
And this assumes no other impact from hurricanes, fires, or other expensive large-scale events does not occur. How long can the US government continue to prop up spending and run 1 – 2 or even 3 trillion-dollar deficits?
The only conclusion that can be made is that a recession is coming, a major recession and it may bring enormous pain and suffering, even more so than the 2008 recession because even then people could scramble. Now they are forced to stay in their homes and watch re-runs because there will be no broadcast live entertainment. Perhaps Amazon will be a beneficiary of the virus since people will ramp up ordering online.
In the long run, this can only mean further pain for brick-and-mortar businesses. We need to buckle in because it’s going to be a rough Christmas season in the US. If we’re lucky. If not, it will be catastrophic
these are impact of covid-19 on economy.are you agree?