Anticipating the Celerity of Recovery of Various Sectors Post COVID-19

by Dhriti Sharma

With the entire nation self-isolating itself and the demands dropping down to an all-time low, Covid 19 has significantly impacted our lives as well as the economy. As months have passed since the coronavirus lockdown, there are concerns arising over revival of the economy post lockdown. Modi Government has allowed a partial revival in some sectors, following strict social distancing measures. But the potential negative impacts of this virus can only be seen from the surface, it’s very difficult to quantify it.

Although, it’s too soon to predict which sectors are going to recover the fastest and which, the slowest, but we can estimate the possible scenario from the recent trends. It is quite obvious that the sectors which are least affected by the pandemic are likely to see faster bounce back as the lockdown measures ease up, and the economy starts to recover. Sectors such as consumer goods & durables, pharma, diagnostics, health care, telecom services might be the early ones to recover as the impact on their businesses has been minimal, as compared to other sectors.

 Sectors like tourism, hospitality, metals, real estate, auto, aviation etc. might be the ones where the revival will be the slowest. They are facing very sharp falls in demand and there are very less chances of catching on once the economy reopens.  

Food services like restaurants, pubs and transport sector as well as hotels are likely to see the most significant impact on their productivity. Aviation and retail trade in nonfood items are also facing sharp falls in demand, but it’s mainly due to postponement and it might resume soon if conditions are okay.                                                                                           

 How long the travel restrictions will continue is likely to lead to an extreme fall in demand for summer holiday bookings. Every sector is dependent on a healthy workforce, so no sector really is completely safe. Health sector has recorded the highest demand these days. Although, the supply restrictions have increased cost of input but then, oil prices have dropped, leading to reduction in transportation costs.

Many businesses, professional services and educational institutions are carrying on their works by logging in from home. But this is not the case in many other sectors. Staffs were employed on temporary or zero-hour contracts and now, they are losing their jobs. Seasonal products also, are going to miss their moment this year. Events, journeys and meals that were specifically planned for the summer are cancelled rather than postponed.              

The fear of shortage in the possible future is making general public stock up food products and other items. Also, consumer confidence is falling very sharply. Everyone is concerning about catching the virus and also because of the unstable income, people refer to save more.                                                                                                                                          

             

Compulsory closure of markets and shops has led to quieter shopping streets.Industries like automobile, textile, electronics, machinery etc. are dependent on inputs from China, South Korea and Italy and therefore are highly vulnerable right now. Production is expected to resume soon but the sales totally depends on the restoration of consumer confidence. With offices, schools and every other institution closed, the demand for services like security, catering, cleaning etc. is almost zero and at the same time, with everyone ‘working-from-home’, the demand for data center services and providers of video conferencing services has seen a huge increase in demand.With social distancing measures and travel restrictions around the globe, mobile communication platforms, e-commerce sites and ‘home comfort services’ like Netflix, Blue Apron, Domino’s, Zoom etc. have seen significant rise in demand. Also, it is predicted that online learning might become the new ‘normal’. This is also going to create a number of job opportunities. Unlike many other financial crises that the world has earlier faced, this one is a health crisis and hence the impacts are going to be significantly different. Although, right now we can only paint a bleak picture, but there is hope for the latter part of 2020.