COVID-19 or the novel coronavirus, which has turned into a global issue, has resulted sectors in a financial crisis all across the globe. Its impact is visible in various business sectors, including banking, service sectors, consumer goods, construction, pharmaceutical, and others.
Jared J Davis Sandusky, Ohio Viewpoint on COVID-19 and its Impact on Finance Industry
COVID-19, according to Jared J Davis Sandusky, Ohio has impacted various business sectors such as,
- Banking Sector- Although this sector may not be directly hit, yet it is the vanguard of the attention of the public. In short, the other sector’s impact has affected the finance and banking sector indirectly. Banks play a pivotal part in the economy’s smooth functioning and offer to fund individuals and corporates. Hence, individual and business stability is vital for banking sectors. A global slowdown in this scenario would impact mid and small-size organizations more acutely. Loans related to business, particularly to such mid and small-size organizations are at risk owing to the lockdown.
Different Service Sectors-Various service sectors such as tourism, travel, and aviation, in particular, have been hit the hardest. The airline industry has faced a steep fall with regards to traffic, especially on the maximum profit international route. In this scenario, airlines have missed the peak travel summer season, resulting in bankruptcies and consolidation across this sector. The interest rate payment is a crucial income for HFC’s/banks, sans which liquidity crisis will crop up.
- Consumer Goods- A steep drop is visible in consumer demand resulting in delayed demand. It has implications on consumer companies as well as their suppliers, which function on small working-capital margins. Hike in price owing to a shortage of supply will impact the consumer sentiment adversely. Exports include 30% of the seafood industry in India. China has a 22% share in the export industry in India has shifted towards lower demand resulting in surplus stock. The prevalent risk/fear of the novel coronavirus spread amid buyers has impacted domestic consumption resulting in lower supplier margins.
- Construction Industry- One industry that has suffered the maximum setback from the COVID-19 pandemic is the construction industry owing to the state’s diversion of funds towards the healthcare sector. The extended impact will hit the industry chiefly on account of the non-accessibility of essential resources. The sale in the real-estate, especially high. And the mid category is likely to get affected.
- Pharmaceuticals- Considering the export front, the government has limited exports of about 13 leading pharmaceuticals for preventing a shortage of medicines. Manufacturing, though in China resumes, yet logistics between China and India is still affected. India imports about 68% of bulk drugs from China and this effect is likely to be for the long-term.
Apart from the sectors above, the other industries that will continue to be affected for the COVID-19 pandemic include leather goods, fertilizers, BPO, IT, retail textiles, and others.