Global Impact of Covid-19
Times Square NYC New Year’s Eve 2020 [Reuters]
Now that 2020 is behind us, we can begin to look ahead at the shiny new year of 2021 and the bright, happy economic news it will bring! But with the anticipation that accompanies every New Year’s Day celebration comes the knowledge that we must also look back to address what may have followed us into this year from the year before. There is no doubt from anyone on planet Earth, that ‘what’ is Covid-19. We rang in 2020 with little understanding of this microscopic adversary. We even called it by another name, the coronavirus. All most people knew about it was that it seemed to travel quickly. Boy howdy. Now here we are, on the gleaming edge of a ‘happy’ new year! Yet here we also are, still fighting this heartless human annihilator. While we will not ever be able to fathom the true sense of the human toll, it’s also true that in record time, science has found a vaccine solution. The world is beginning to breathe a small sigh of relief, albeit through a mask. Now that science has taken a major step in developing a solution to the pandemic, we must look back at the havoc it did wreak, some of the solutions industries found to combat the damage, and what we really do have to look forward to in the new year.
2020 forecasts were accurate.
2020. Unprecedented. The most unprecedented year in human history. If we learned one thing in 2020 as a planet, it was that we knew nearly nothing of how to really fight the new challenger Covid-19, health-wise or otherwise. While the economists made predictions of how bad it would get, mostly it got even worse. In June, global income loss per capita from Covid-19 was predicted to be the worst in history by the end of 2020. And yes, we got there. The travel, tourist and related commodities markets took the worst hit by far. According to the International Air Transport Association, the worldwide airline industry is predicted now to lose $157 billion in 2020 and 2021 due to the pandemic, much worse than previous estimates. With only a third of travelers flying in 2020, a gloomy $510B was lost on sales in the airline industry alone, not counting all related travel industries such as hotels, convention centers, and ground transportation. The cruise industry also took its worst hit ever, selling off luxury liners piecemeal to bolster cash on hand. With oil demand at a standstill along with the world, price per barrel dropped to its lowest in 18 years, devastating the petroleum industry. According to the Bureau of Labor Statistics, in the US alone, almost 4 million jobs were lost in 2020. From a global investment perspective, an unprecedented rise in the volatility index level paired with its highest level in history rocked the global equity markets and caused investors to investigate their put options rather than risk the uncertainty. Global stock markets teeter-tottered for the first half of 2020 and even now are taking swings and spikes as grim death and infection rates rise or fall. The devastation which the virus has taken is just now coming into focus. And while the planet attempts to counteract the fallout from Covid-19, the fight is not quite over yet.
Yes, 2020 was barbaric, and we must remain vigilant both physically and economically if we expect to survive. But not all economic news from 2020 was dismal. Some things still worked well, and some industries thrived and blossomed during the pandemic. With courage and innovation, some industries branched out at record speed to bring a needed good or service to the forefront, turning stale ideas upon their heads. The economic bright spots that arose from the ashes of 2020 have the real potential to carry us forward through the new year, and possibly beyond.
A distillery employee makes hand sanitizer during the pandemic
Two of the winners of 2020’s economic Hunger Games were no surprise, Clorox and Keurig Dr. Pepper. Others were predictable, such as health care services. But some industries that many had previously considered frivolous became absolute necessities. Streaming services, delivery services, and home workout equipment and services became have-to-haves as streets emptied and the world sheltered in place. While small businesses took a hit overall, some of the little guys found their niche ideas on fire and business booming. Specialty stores such as wine shops and boutiques continued to flourish, contingent on their ability to pivot to delivery-only sales and keep up with inventory requirements. Businesses who provided raw materials found themselves almost unable to keep up with demand as the need for plastics, ethyl alcohol, textiles and paper skyrocketed. But sometimes it simply took creativity. Distillery businesses soon realized that their equipment could be used to make hand sanitizer, and quickly changed gears to manufacture and deliver the new product. As demand slowed down later in 2020, some of these businesses smartly reached out to vendors to procure contracts to continue production. Other success stories that came from 2020 cover markets in home health care, self-care, home care, lawn care, pet care. Clearly this pattern indicates that humanity is nurturing itself as best it can while its unforeseen enemy is neutralized.
The best news of 2020 is, of course, a vaccine for Covid-19. People, ideas, companies and kismet came together in 2020 to get the chaos under control and find solutions. Perhaps the most reassuring news came from Pfizer’s Chief Communications Officer Sally Susman, who said, “We are moving precisely at the speed of science and pushing back hard on politics.” Pharmaceutical giants Johnson & Johnson, AstraZeneca, BioNTech, GlaxoSmithKline, Merck, Moderna, Inc., Novavax, Inc., Pfizer Inc. and SanofiWhile have all signed a pledge to stand behind the integrity of science in working together to develop and distribute safe, effective Covid-19 vaccine. While the tide is turning and the vaccine finds its way to every person, the world can see a glimpse of better global health coming. And in the wake of this hopefulness, the economy will clumsily find its footing again. While bittersweet as we take time to reflect on the sobering human cost of Covid-19, it is also exciting to be part of so many historical events. And, as economies and people slowly begin to heal from Covid-19, we will do what we’ve always done – work together to accomplish the task at hand.