Conduct a research on the negative impact of the coronavirus as one of the socio-economic issues on businesses
Answers
Answer:
The COVID-19 pandemic has resulted in over 4.3 million confirmed cases and over 290,000 deaths globally. It has also sparked fears of an impending economic crisis and recession. Social distancing, self-isolation and travel restrictions have lead to a reduced workforce across all economic sectors and caused many jobs to be lost. Schools have closed down, and the need for commodities and manufactured products has decreased. In contrast, the need for medical supplies has significantly increased. The food sector is also facing increased demand due to panic-buying and stockpiling of food products. In response to this global outbreak, we summarise the socio-economic effects of COVID-19 on individual aspects of the world economy.
Explanation:
2.2. Petroleum & oil
During a meeting at the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna on March 6th, a refusal by Russia to slash oil production triggered Saudi Arabia to retaliate with extraordinary discounts to buyers and a threat to pump more crude [11]. Saudi, regarded as the de facto leader of OPEC, increased its provision of oil by 25% compared to February – taking production volume to an unprecedented level. This caused the steepest one-day price crash seen in nearly 30 years – On March 23rd, Brent Crude dropped by 24% from $34/barrel [12] to stand at $25.70 [13]. Although a deceleration in the number of COVID-related deaths has caused some stabilisation of oil prices, there is still much uncertainty.
On the background of a viral outbreak already dampening the demand for oil, this oil-price war is predicted to have grave implications for the global economy. In more ordinary times, cheap oil may have functioned as an advantage for economies. However, savings on petrol are unlikely to be redirected into more spending as populations are instructed to practise social distancing and the working class are uncertain about job security. Furthermore, any increase to consumer activity is likely to be outweighed by damage caused to populations reliant on revenue from other forms of energy such as Shale gas [14]. Economic modelling from Imperial College's Centre for Climate Finance and Investment has suggested ‘Carbon Dividends’. A £50/tonne of CO2 tax could be channeled into UK households in order to stimulate consumer spending whilst keeping oil prices at the same level as February 2020 [15]. However, this relies on turbulence between Saudi Arabia and Russia, thus should not be considered sustainable for the long-term.
3. Secondary sectors
3.1. Manufacturing industry
A survey conducted by the British Plastics Federation (BPF) explored how COVID-19 is impacting manufacturing businesses in the United Kingdom (UK). Over 80% of respondents anticipated a decline in turnover over the next 2 quarters, with 98% admitting concern about the negative impact of the pandemic on business operations [16]. Importation issues and staffing deficiencies stood out as the key concerns for businesses due to disruption to supply chains and self-isolation policies. Indeed, for many roles within a manufacturing company, ‘working from home’ is not a viable option. As the UK is adopting similar protective measures to the rest of the world, and due to the global overlap of supply chains, we can expect these anxieties to transcend borders. The Chemical Industry is predicted to reduce its global production by 1.2%, the worst growth for the sector since the 2008 financial .