Covid-19 has changed the landscape of the world as we know it. With over a quarter of the world now in lockdown it has had notable economic implications and is costing industries and jobs across the globe. Here are some of the industries worst impacted by the illness.
According to a supply management survey that was conducted, supply line disruptions have been common. In fact, three out of four businesses in America reported these irregularities, which arose from the COVID-19 pandemic. Although China is one of the largest shipping hubs in the world, factory workers have been sent home and ports have been closed because of the coronavirus. According to a statement from the International Chamber of Shipping, approximately $350 million has been lost worldwide each week.
Because the shipping industry is globalized, virtually everyone has been impacted, including people in America. Back in January, transport volume in North America decreased by 9.4% compared to January of 2019. Currently, more than 225,000 Americas work within the freight transportation industry. Billions of dollars worth of wages for workers are currently in jeopardy.
Diamond Princess, a luxury cruise ship, was where the first major outbreak cluster occurred outside of China. A minimum of 634 people on the ship have been diagnosed with COVID-19, including crew and passengers, and there were two deaths. The cruise industry has been impacted heavily by this. Since then, a Grand Princess cruise shipped that docked in Oakland has at least 28 confirmed cases. At the time of writing, there are a minimum of seven cruise ships that have been unable to enter any country. Passengers on these ships have tested positive for the virus or have demonstrated symptoms.
Three of the biggest cruise companies: Carnival Corp., Norwegian Cruise Line Holdings, Royal Caribbean have decreased by more than 50%. Cruise Lines International Association, an industry group, has stated that $53 billion is contributed to the American economy by the cruise industry yearly.
Even smaller companies are hurting according to Marcel Perkins of Galapagos private charter facilitator Voyagers Charter Agent as Ecuador has been hit by the ravages of Covid-19. The country has had relatively low numbers of cases, however the authorities have stopped flights into the country and announced a 14-day quarantine for all visitors from Europe and the US, causing big problems for the industry.
The White House has expressed that it plans to issue some kind of relief bill that will help the industry stay afloat during this time.
Tom Hanks, an Academy Award-winning across, released a statement saying that he and his wife, Rita Wilson, had tested positive for COVID-19. As a result of this, the production of the movie he was currently shooting was shut down. This film was among many movies and TV shows that ceased production. In some cases, this was simply done to be cautious, and in other cases, it was done because a member of the cast or crew has shown symptoms, had positive test results or had been in contact with someone that has test results. It is likely that these movies would have contributed billions of dollars to the box office in the United States, and would have boosted the economy in other ways as well.
Whenever a production is shut down, there are hundreds of people that are put out of work. It's not unusual for a film to employ more than 500 crew members, such as lighting technicians, drivers, camera operators, production assistants, directors, and more. For large movies that employ a lot of special effects, there may be thousands of workers credited. Currently, more than 220,000 have jobs in film production.
The demand for automobiles has decreased as the coronavirus pandemic has gone on. Because many workers have concerns about the security of their jobs, they are saving their money instead of purchasing new vehicles. This means that approximately 1.3 Americans who have jobs in used or new car dealerships could lose their jobs. According to researchers, the year-over-year decrease in American auto sales could be as high as 20% this year. Ford, General Motors, and Fiat Chrysler have seen stock shares decrease 25% since the start of March.
In addition, there have been significant disruptions in the supply chain for automakers. Four out of all automobiles produced worldwide contain parts that were made in China. COVID-19 has made it more difficult to import these parts.
Gas and Oil
Since many people are working from home and aren't traveling unnecessarily, there has been a significant decrease in the need for gas and oil. According to the International Energy Agency, the amount of barrels of oil needed this year is expected to decrease 90,000 over what was needed in 2019. Before the pandemic began, the IEA was predicting that demand would increase by more than 800,000. China is the top consumer of energy in the world. Because the outbreak originated there, the impact on the oil industry has been particularly severe. Oil prices have rapidly decreased. On March 16, barrels were selling for less than $30 each.
COVID-19 has wreaked havoc on the retail industry in the United States. Many stores have shuttered already. Apple has announced that all of its stores located outside of China will be closed until March 27 or later. Major retailers in various retail industries, such as sporting goods, tech, and fashion have made the same kinds of announcements.
Some companies, such as Nike and Urban Outfitters, have said that they are planning to pay employees that are out of work, at least on a short-term basis. While this is beneficial for workers, it will have a negative impact on the bottom lines of these companies. In a statement to CNBC, an analyst from Jefferies said that for most retailers, brick and mortar stores make up 75% of sales. Because of this, significant earnings per share decreases are anticipated for 1Q. Because many retailers seem to be paying employees during this time, the declines will be even more severe.
Chinese factories that are located in locked-down areas have been closed since the end of January. Because of this, a number of American tech companies are unable to produce products as usual. The production of smartphones, smartwatches, and video game consoles are expected to decrease by more than 10%. A shortage in iPhones could cost Apple $67 billion. Nvidia, who produces graphics cards, decreased its first-quarter earnings projections by $100 million, stating that its supply chain has been disrupted by the pandemic.
The factories and corporate offices in China for Google, Samsung, and Apple have all been closed. In addition, a number of major tech companies have headquarters in and near Seattle. This is one of the areas that has been impacted most heavily by COVID-19. Microsoft stated that it planned to continue to provide payment to its 4,500 hourly employees, even though many workers have been sent home.