While the social media seems to have a round of trolls & memes on the situation, maybe to lighten up the gruesome truth a bit; the global business is taking a huge toll due to the coronavirus epidemic.
Since the time WHO (World Health Organization) declared coronavirus outbreak a public health epidemic of international concern earlier this year, it has spread like a wildfire.
From the tech sector to airlines, the health sector, supply chains everything is on hold.
It is reported that there has been a loss of $29 billion in airline revenue. China auto sales down by 92 percent.
According to a Reuters poll of economists, China’s economic growth expected to slow to 4.5% in the first quarter of 2020.
There are now more than 85,000 confirmed cases of COVID-19 globally, the new coronavirus that emerged in Wuhan, China, in December and is spreading around the world.
Production shortages & delays
Since the outbreak, the maximum effect has been on the massive manufacturing shortage.
Factory shutdowns are slowing the flow of products and parts from China, affecting companies around the world, including Apple and Nissan.
Smartphones, cars, VR headsets & other tech accessories have been banned. The Foxconn and Pegatron closures in China, for example, are expected to potentially delay iPhones and AirPods production as factory workers are unable to resume work.
Major company Facebook has stopped orders of its latest Oculus Quest VR headset. The reason being the outbreak of coronavirus.
The company stated, “[Like] other companies we’re expecting some additional impact on our hardware production due to the Coronavirus. We’re taking precautions to ensure the safety of our employees, manufacturing partners, and customers, and are monitoring the situation closely. We are working to restore availability as soon as possible.”
Due to factory closures, Tesla even postponed it’s Model 3 deliveries for about one week. Other companies like Oppo, Xiaomi, Lenovo, and Huawei, have delayed their production.
With many companies and countries depending on the health of China’s economy, here are a few ways the outbreak is sending waves around the world.
Effect of coronavirus on supply chain
When it comes to supply chains today, the system is more complex than they were even five years ago. There are factories in China that are locked out for an unlimited time, production sites that are running low because of the shortage of production from China.
There is a disruption of delivery ships from various parts of the world to China. This is likely to impact at least 56,000 companies around the world with suppliers either directly or indirectly.
From the Indian perspective, the effect has been on various sectors including manufacturing and export sectors, particularly medicines, electronics, textiles, and chemicals.
It should be kept in mind that China is India’s one of the biggest sources of goods, the number of which goes to $30bn a year. Up to 70 percent of active pharmaceutical ingredients and close to 90 percent of certain mobile phone parts come from China.
Effects of coronavirus in oil demand
China is currently one of the largest oil importer in the world. However, with the epidemic of coronavirus hitting like a hailstorm, International Energy Agency (IEA) has predicted to have a drop in the global oil market in a decade.
According to their reports, the coronavirus has lead to a major shutdown in the industries & is taking a hit on China’s economy.
“Demand is now expected to fall by 435,000 barrels year-on-year in the first quarter of 2020, the first quarterly contraction in more than 10 years,” the IEA said in its latest monthly report.
Hazards in commercial sectors
The shortage of manufacturing from China is affecting organizations around the world & it is taking a toll on the finances.
Even the pharmaceutical companies are facing disruptions due to coronavirus.
A report from the UN’s International Civil Aviation Organization (ICAO) has said that global airline revenues are expected to fall by $4-5 billion in the first quarter of 2020 as a result of flight cancellations.
It also forecasted that Japan would lose $1.29 billion of tourism revenue in the first quarter due to the drop in Chinese travelers while Thailand could lose $1.15 billion.
In short, the effects of coronavirus are very evident & much of it rests upon the response from healthcare sectors. Countries are making some conscious effort to reduce the effect of this epidemic providing medical access & control to spread the disease.
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