The novel coronavirus disease 2019 (COVID-19) outbreak is a major shock for the global economy, disrupting production, trade and business worldwide. Many countries have already adopted or are adopting measures aimed at preventing the further spread of the virus, increasing the capacity of their health systems and providing relief to those citizens and sectors of the economy that are particularly impacted.
The crisis, besides threats and risks, constitutes specific potential challenges for industries around people and commercial operations. The lockdown that almost all countries are currently experiencing, the several travel restrictions and the limitation in people’s movement, although it is too soon to make a safe prediction at this point as the disease is in progress, is expected to severely affect some industries more than other.
Due to the pandemic outbreak, based on our preliminary estimations as shown in the graph below, more than 68% of the economic activity in Cyprus is expected to be negatively affected. Industries such as construction and tourism are expected to be severely impacted. Since most of the companies are switching to remote connectivity, online ordering systems and work from home environments, the information and communication industry is estimated to have a positive outlook.
Millions of people around the world face losing jobs. In Cyprus, 69% of the labor force, as seen in the graph below, is working in industries negatively affected by the pandemic outbreak. If we estimate that a long term 25% or more decrease in companies overall turnover will affect these industries, this will also have a negative Impact on their workforce. A possible increase in unemployment, except from the personal and social costs, will impose a heavy burden on the already suffering economy.
Business as usual may not happen for a while, but the business of managing risk is more important than ever, as the types of risk that businesses face shift. Making workable plans is the key to making things happen and help people and businesses through this unprecedented time. It is time for careful, meticulous strategic planning, adjusting to the evolution of the pandemic.
Immediate targeted measures must be taken and implemented by the State, in order to ensure survival and minimize as much as possible the negative effects on companies, households and the financial sector after the battle against coronavirus has been won and the virus-halted economy restarts. The gradual loosening of the strict lockdown measures and the return to “normal”, must be done in a safe and measured way, in order to minimize potential infection rebounds and to assess in each stage the impact and disease progression.
Businesses must be kept in life and at the same time be ready and prepared after the crisis to move on to the next level, the new reality: a new global, economic and social reality. The coronavirus pandemic will eventually come to an end. In the meantime, businesses must keep monitoring emerging issues and manage the risks they face with agility that comes from improved awareness. Development and Reforms are necessary for all industries. The new season is expected to be very different. Nothing will ever be the same again.