Labor crunch and supply delays: feeling the strain of COVID-19

Often, when the economy runs into trouble, it goes through a slow glide from good times to bad. Other times, it is more like a fast car slamming on the brakes. A potential COVID-19 recession looks more and more like the second situation — and that has big implications for how painful a downturn would probably feel.

Companies are already starting to feel the strain from labor shortages and supply chain disruptions caused by the outbreak of COVID-19 which is affecting regional economies. To cope with grim growth prospects, governments are leaning on fiscal stimulus to weather the crisis. Such policy measures will largely be determined by politics as different sectors compete for limited resources.

Moreover, the disease and efforts to contain the disease cause slowdowns in a number of industries, supply chains across the globe are being affected. Industry players also have to contend with the issue of late deliveries of raw materials, as factories in China were shut for an extended period after Chinese New Year and have been slow to restart.

COVID-19 already affected the global economy in three main ways by directly affecting production, by creating supply chain and market disruption, and by its financial impact on companies and financial markets. This outbreak also can be emerging several new business opportunities such as E-commerce, online schooling, Telecommuting associated industries, health related industries & insurance coverage etc.

However, a great deal depends on the public’s reaction to the disease.