The tragic outbreak of the global COVID-19 virus has had drastic negative effects around the globe, resulting in worldwide malady as well as massive disruptions to work and education. It has steered the world economy towards a potential recession. On March 11th, 2020, the WHO officially named the virus a worldwide pandemic.
Originating in Wuhan, China, its spread throughout the globe has seen surges in Italy, South Korea, and Iran. The United States and other European countries have also seen many cases, and they continue to rise worldwide. Many events have been cancelled in addition to work and educational disruptions, and stores have faced shortages in basic supplies while quarantines have been established worldwide.
Another major issue caused by the virus is the effect on worldwide supply chains – factories around the world have closed, making it difficult to provide necessary parts to other areas of the globe. This massive disruption has rippled throughout the economy as a massive disruption.
As worldwide demand has fallen, businesses have adjusted accordingly by dropping inputs (including workers) and reducing outputs. The aviation industry is a great example, as it has dropped the number of active planes and workers.
Throughout the coming weeks, we will have a clearer view of the pandemic’s ultimate trajectory. It has already had a massive impact on the world, and how much deeper the impact will be is something we will soon realize. Companies must take action to face these challenges and protect their workers who allow them and our worldwide economy to flourish.
Cited from McKinsey & Company, this piece is written to give global corporate leaders a strong viewpoint on the situation and how it may evolve from here, as well as its implications to their companies.
The Economic Impact of the COVID-19
McKinsey has analyzed the economic effects of the virus and determined two possible scenarios that may take place: a slow economic recovery and a prolonged contraction globally.
COVID-19’s Supply Chain Challenge
McKinsey report suggests that one of the biggest challenges that has manifested during the COVID-19 events has been the effect on world supply chains that begin or go through China.
Proper Response to the COVID-19 Virus
McKinsey suggested seven actions businesses of all kinds can take going forward that will help their efficiency and maintain their employees’ health and safety during this crisis.