5 sectors of the world economy, affected by the coronavirus

an Outbreak of coronavirus is already having a negative impact on the global economy, and experts predict that the negative impact will have a lasting effect.

Suffer from the epidemic the most different industries — from automotive manufacturing to tourism. Stock markets also respond to the epidemic in China, as the economy of this country is the sixth part of the world economy and has a significant impact on virtually every industry.

Below we describe the main sectors of the global economy, affected by the coronavirus.

supply Chain

Many companies were forced to suspend production at plants in China due to restrictions on entry, which put China in connection with the outbreak.

In particular, Airbus has suspended production in Tianjin. The company in this town produces about six A320 aircraft per month, so the suspension of production could have a material adverse effect on the performance of the company.

There are other companies that have been forced to take similar measures, among them Toyota, General Motors and Volkswagen.

the Impact of coronavirus is associated not only with China. South Korean carmaker Hyundai has also suspended production lines due to failures in the supply of spare parts between South Korea and China.

Another major automaker — Honda – three Chinese plant in Wuhan, the center of the spread of coronavirus.

Tourism

In recent years, the number of Chinese tourists travelling around the world, has increased dramatically. And if in 2000 the number of Chinese tourists amounted to only 10.5 million in 2018, it has already reached 150 million people. This suggests that tourism is one of the industries which suffered most from the outbreak of coronavirus.

Coronavirus negatively affected next to China area, primarily in Japan, where Chinese tourists account for 40% of all visitors to the country and spend the most money.

Tnow many cruise ships from China are not allowed in national ports, while the passengers are not checked for the presence of the virus.

Royal Caribbean withdrew eight trips to China. The company will not tolerate at his court all the passengers who were on the territory of China or Hong Kong within the last 15 days. These limitations can cost the company 50 million dollars.

the Tourism sector of Thailand is also under threat. The economy is in a difficult situation, and Chinese tourists give the country’s economy up to 4% of GDP.

Also, the negative influence of experience and other popular tourist destinations such as Bali. Association of travel agents of Indonesia stated that 10 000 Chinese tourists canceled travel to Bali in just one day.

Parallel to this, the suffer and the airlines, which also noted a decrease in ridership. In addition, airlines have to cancel flights in and out of China. So, Cathay Pacific has reduced the number of flights to China by 90%. The airline has been asked 27 000 employees to take unpaid leave for three weeks so the company was able to cope with the crisis.

Another industry associated with tourism is hotels. They also suffer losses, as tourists cancel trips, therefore, cancelled the reservation of hotels.

beauty industry

the Experts at UBS noted that the beauty industry may be at risk of a serious crisis due to the outbreak of coronavirus.

the fact that the sector is substantially dependent on retail buyers. And this, in turn, means that the Chinese market accounts for a substantial share of the business, because Chinese consumers are among the most active in the world.

Analysts at UBS believe that the company Estée Lauder is particularly vulnerable to the situation of the coronavirus, as China accounts for half of all revenues in the Asia-Pacific region.

Luxury clothing

the Luxury brand Burberry and other brands in this category, fromsaid that their business in China is in a very difficult situation, which can deteriorate if the coronavirus continues to spread.

Earlier media reported that 24 of the 64 Burberry store in mainland China were temporarily closed due to the outbreak of the virus.

Analysts at UBS also noted the negative impact of the virus on all luxury goods.

Alcoholic beverages

Another sector that is feeling the impact of the epidemic, a sector of alcoholic beverages.

Analysts at UBS note that the most vulnerable are those brands like Brown-Forman, Diageo, Pernod Ricard and Rémy Martin.

In their review they note that in connection with the reduction in the number of international travel should see a reduction in the number of purchases in Asia Duty Free, which has a negative impact on the sales of these brands. In addition, the negative impact also have protests in Hong Kong, experts of the Bank.

Moody’s Analysts also believe that the spread of the disease will have a negative impact on consumption in China, European alcoholic beverages, while China is one of the largest markets for these brands.