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It’s safe to say that the world is not going to be the same after the pandemic. How exactly? This article contains an analysis of the current trends and future predictions based on them.
Below are the trends caused by the ongoing pandemic, directly or indirectly. If the situation does not improve radically within the next few weeks, there is a good chance these trends will continue into the near future.
The Impact of Coronavirus on the Global Economy
First and foremost, it is the overall economic downturn most countries are currently experiencing. A direct result of the Great Lockdown, this was something one could expect although, perhaps, not to such extent.
Gross World Product (GWP)
In their recently-published study
, experts at the International Monetary Fund suggest that the ongoing economic crisis will hit even harder than the Great Recession of 2008-2009, and “the world economy will experience the worst recession since the Great Depression.” They predict the global economy to shrink by 3% in 2020, which is indeed quite frightening when compared to the previous crisis.
During the Global Financial Crisis of 2009 emerging markets and developing economies were able to maintain at least some growth. This time around, almost everyone is expected to go into recession - except for India and China as these countries seem to be managing the pandemic more successfully than their Western counterparts.
Stemming directly from the previous point, shrinking economies around the world will inevitably lead to people losing their jobs. In fact, this is already happening in the countries that have been hit hard by the pandemic. New weekly unemployment claims (which is one of the key economic indicators) in the United States reached their historical high in early April (see the graph below courtesy of FT
Although the number of new claims has been steadily decreasing ever since the peak, it still does not invoke much hope. A similar situation can be observed elsewhere in the world - millions of people have lost their jobs and, what’s even worse, any certainty about the future.
Governments reacted by providing financial aid to both the unemployed and businesses but that is not enough to keep the consumer demand on acceptable levels. According to the official CEIC forecast
the unemployment rate in the US will increase by 300% and reach a 10-year maximum by the end of 2020. China will also be affected, although to a lesser degree, which correlates with the GDP growth predictions in the previous paragraph.
2020-2021 unemployment rate forecast for the United States
2020-2021 unemployment rate forecast for China
International Travel and Tourism
This important sector of the world economy has practically ceased to exist since more than 100 countries introduced travel restrictions effectively reducing the number of daily flights from 200,000 to around 60,000 (according to Flightradar24 data
Whether it will stay that way for long is a tough question. However, it is safe to assume that the imposed restrictions will not be lifted all at once - this process may take a few months or even a year. Plus, people will probably be somewhat reluctant to travel a lot, afraid to catch the virus.
The effect of the COVID-19 pandemic on the environment has been well-publicized, to the point it has become a subject of numerous memes. On a serious note, greenhouse emissions are already down and the air quality has gone up in most countries.
Satellite images of major industrial centers in different parts of the world clearly show this effect - here is the one that is really indicative of the change in the level of pollution (courtesy of BBC
However, the COVID-19 pandemic has had some negative effects on the environment too resulting in an increased amount of medical and hazardous chemical waste.
Since all the consumers are at home and most stores are closed due to the lockdown, it is no wonder the retail sales plummeted in both the US and China although the latter has been showing slow improvement after the country started to go back to normal life.
There are other worldwide socio-economic impacts of the 2020 coronavirus pandemic that are quite important but have not been mentioned yet:
- Over 90% of the students in the world (1.7 billion people, UNESCO data) have been affected by the lockdown. A large part of them had to switch to distance learning using video conferencing
- Almost all sporting events (including the 2020 Summer Olympics in Tokyo), concerts, exhibitions, and conventions have either been canceled or postponed
- Bars, cafes, and restaurants have been limited to takeout orders and delivery or closed down completely
- Shortages of surgical masks and other medical equipment due to panic buying
Post-COVID-19 Trends: What to Expect?
This segment covers the changes that are highly likely to happen in the Post-COVID-19 world based on the analysis of the current trends, mostly in the areas of business and social life. Some of these changes are already showing in society and can be confirmed by statistics. Others are rather speculative but nevertheless follow common logic and have a high probability of occurring in the nearest future.
Rise of Online Services
Not that these services were struggling in the past but the current lockdown has pushed the demand for online shopping and entertainment greatly. While most companies have been losing money or at least not making as much as they used to, services like Amazon, Netflix, and Zoom have seen a huge spike in usage starting mid-to-late February, which lead to their share prices explode as seen in the image below courtesy of BBC.
In fact, at one point during the stock market trade, streaming platform Netflix was valued more than ExxonMobil, a giant oil company. This shows exactly what is in high demand at the moment.
According to the NY Times data
, this is also true for some other online services and apps in such areas as:
- News (in these turbulent times, people are turning to official media outlets for reliable information on the current crisis, perhaps too much sometimes)
- Remote work (even though they are stuck at home, people still need to communicate, collaborate and learn - not only via Zoom. Apps like Google Duo, Nextdoor.com, Houseparty, Google Classroom, and Microsoft Team have all seen increased DAU numbers recently)
- Video-sharing and social networking (apps and services like Instagram, YouTube, Twitch and TikTok) have been on the rise ever since the outbreak occurred)
What it all essentially means is that the current lockdown has pushed many to use these online services a lot - whether it’s for entertainment, studying, or work. There is a good chance these services will retain a large part of their current users after the lockdown while the users themselves, having discovered a new and useful tool, will stick to it even when they are not in quarantine anymore.
The long-term consequences of this trend may include a massive shift towards online streaming for the whole entertainment industry. Even after the quarantine, people will be highly unlikely to rush into cinema theaters, sports arenas, concert venues, and other mass gathering events. At the same time, the public’s craving for entertainment and art will hardly go away so that is why more online releases, live event streams, and other forms of digital distribution are expected.
Retail Industry Reshaped
In the US, the world mecca of supermarkets and shopping, sales of clothing and accessories fell by more than 50%
in March and is expected to do even worse in April. Department store chains have furloughed hundreds of thousands of employees already. When the quarantine is lifted, there is no telling how many of them are going to come back - we mean both department stores and their workers.
This is due to multiple reasons - first and foremost, it is the overall economic decline and lack of money to spend. Second, it is the quarantine state of mind that will last much longer than the quarantine itself - people will simply be afraid to go shopping in public places. Finally, it is the rise of online shopping, which many have discovered to be quite convenient during the lockdown. Who knows how many of them will stick with it?
It is also interesting to see how people’s spending habits have changed during the pandemic and what product categories have been in demand recently. This cool infographic (courtesy of Visual Capitalist
) provides an interesting insight into the state of mind of an average consumer during the quarantine and probably sometime after it.
Anything related to traveling and lifestyle has seen a steep drop in sales while food and drugs are on the rise. It is quite surprising to see people ordering that many bread machines, which is a perfect example of panic buying (same goes for the toilet paper).
A similar effect can be observed in the dining industry - restaurant spending fell by more than 60% in the US in March with the sharpest decline in fine-dining, lunch, and late-night food (see the stats below courtesy of BAC via The Atlantic
Even when the restaurants reopen, there is little hope they will make a profit during the summer. They will most likely have to follow strict social distancing rules by limiting their seating capacity and adding a takeout option.
Work and Study Goes Online
Among many other calamities, the Great Lockdown has forced people to seek alternative ways of doing things that were mostly offline before - two prime examples here are remote education and work. Many businesses and schools had to face a tough choice - either suspend their activity completely or go remote. The choice was obvious and now, some two months later, it is safe to say most of them have adapted to the new reality - perhaps, too well.
According to a recent survey by Gartner (via CRN
), 74 percent of the North American CFOs and business finance leaders expect at least 5 percent of their previously full-time office workforce to become permanent work-from-home employees after the pandemic ends. Plus, some people might actually like working from home and prefer not to go back to the office, especially millennials
Disparities, however, will remain and perhaps even worsen as people with a higher level of income are more likely to be able to work from home, as evident from this graph (courtesy of Brookings
This global move to WFH (working from home) may also lead to some interesting consequences, such as the increased demand for a more reliable and faster Internet connection, which will, in turn, push Internet providers and manufacturers of telecommunications equipment to come up with an adequate solution.
Increased Health Awareness
The pandemic might subside soon but our fears won’t. What Vox aptly named a “quarantine state of mind” in their recent article
is a concept we will have to live with for at least a few months if not the whole year.
This means that some things people have gotten used to during the quarantine will most likely become a staple in their daily lives long after the virus is gone - things like:
- Wearing surgical masks in public places
- Social distancing everywhere - in the streets, offices, restaurants, etc.
- Absolute sanitizing - from door handles to сutlery, anything and everything one human touched before the other
According to Statista
, people in both North America and Europe have already started to spend 50% more on health and hygiene as well as household cleaning products in April 2020.
Post-COVID-19 fears might also bring stricter measures to the public transportation industry - obligatory masks for all front-line workers, health screenings upon arrival, and so on.
Death of Face-To-Face Economy
Some quick stats to start off with:
- In March 2020, ⅓ of American consumers ordered their groceries online and had them delivered (a few dozen million of them did it for the first time ever - source)
- By the end of this year, the share of online shopping in total retail sales will increase from 15 percent to 25 percent
- Instacart, a major grocery delivery company in the US and Canada, is reported to add 300,000 workers over the next three months
These numbers, combined with common logic and the desire of businesses to adapt to the new reality, might indicate the birth of a new, all-delivery economy. As more consumers are starting to order more different items online, a lot of changes, innovations, and advancements are likely to happen in the delivery industry over the next few years. And, of course, the competition will become super tight - all in all, a very promising and hot market.
This one might seem a little bit far-fetched at first. Millions of people cannot just simply move out of their apartments in big cities.
However, this may start to sound like a real possibility if one considered the growing number of people working from home, the ever-present fear of catching the virus in a public place, and the recent events in New York when tens of thousands of people fled the city within mere days amidst the peak of the pandemic.
This trend actually got started before the pandemic - major American cities began losing people
back in 2018, mainly due to inflated prices on everything. There is a good chance it will go into hyperdrive during and after the pandemic.
To sum up all of the information presented in this article, here are the main post-COVID-19 business and social trends described here in this article:
- The global economy will shrink by at least 3% this year
- By the end of 2020, the unemployment rate will have reached 10% in the US
- Air pollution and carbon emissions will drop by at least 25%
- Streaming media will dominate the entertainment industry
- Online collaboration and social networking services will continue to gain popularity
- Distance learning and online courses will become a viable alternative to traditional in-class education and receive more credibility among the general population
- Many retail stores, cafes, and restaurants won't reopen. The ones that will, may have to undergo a serious transformation in order to conform to the new public safety and health standards
- The number of people working from home will increase compared to the pre-COVID era
- Wearing masks in public and sanitizing all surfaces will become a staple
- Delivery industry will thrive and develop rapidly
- People will tend to avoid living in large urban areas preferring to settle in suburbs and small towns