How Will Coronavirus Impact the Economy?
Coronaviruses are a family of viruses that cause any number of flu-like symptoms ranging from the common cold to severe acute respiratory syndrome (SARS).
The current strain that continues to dominate the headlines is known as coronavirus disease 2019 (COVID-19) – so named because it manifested in 2019. The most common symptoms include coughing, fever, and shortness of breath. However, a small percentage of infected patients exhibit more severe symptoms. These include kidney failure, major respiratory challenges, and in some cases – death.1
This variation can make the disease so dangerous.
Asymptomatic carriers can transmit the disease without showing any visible signs of infection. To make matters worse, the coronavirus can live in the air for several hours – and on surfaces for several days.2
This transmissibility makes the disease tremendously difficult to track – especially given how few tests there are for detecting the virus. Yet with over 200 countries impacted worldwide, it’s clear that coronavirus will place a huge strain on the global economy.3
The question is, how bad will it be?
The Economic Impact of the Coronavirus on China
The coronavirus was discovered in Wuhan, China at the end of 2019.4 Unfortunately, those early cases went underreported – leading to widespread infection and many deaths. When Chinese officials finally realized the gravity of the situation, they shut down the city, then the province, and then the entire country.
New cases of the coronavirus now appear to be on the decline throughout China.5 To get to that point, China implemented mandatory lockdowns to help slow COVID-19’s spread. As a result:
- Retail sales during the first two months of 2020 were more than 20 percent lower than last year6
- The country’s industrial output shrunk almost 14 percent during that same two-month stretch6
- Unemployment went from 5.2 percent in December to 6.3 percent in February6
It’s significant enough that China’s economy is expected to shrink by as much as 6 percent in 2020 Q1. If true, this will be the first economic contraction the country has faced since Chairman Mao’s Cultural Revolution in 1976.6
These numbers might not mean much to the average American. In today’s hyper connected, globalized economy – what happens in the world’s largest manufacturing center directly impacts supply chains across the planet. This is especially true in the United States, which is one of China’s biggest trading partners.
The Economic Impact of Coronavirus in the U.S.
Like China, the U.S. response to early coronavirus outbreaks was slow – resulting in an exponential surge in new cases. Moreover, the testing infrastructure in the U.S. has ramped up, but still lags behind most of the world, making it impossible to know the true number of coronavirus cases throughout the country.7
To help stem the tide, a growing number of cities and states have begun encouraging people to stay home. Doing so isn’t a problem for telecommuters or those who can move more of their work online. Regardless, there are millions of janitors, waiters, flight attendants, and those in the gig economy who won’t be able to earn any income for the foreseeable future. The same is true for many businesses that have had to shutter their operations indefinitely – from movie theaters to restaurants to concert venues.
How Americans will continue to cover ongoing expenses such as rent, utilities, and groceries is currently unknown at the time of this writing.
Equally concerning are the long-term economic consequences that have yet to fully materialize. For example, disrupted supply chains will make it difficult to source supplies, replacement parts, and other essential items moving forward.
Worse still, stocks are already in freefall – with some of the biggest reported losses in generations. All of this is happening against a backdrop of diminished consumer demand, less overall manufacturing, and an overburdened healthcare system.
What Can Companies Do to Protect Themselves?
Below are some important steps businesses can take to help limit the impact that coronavirus has on their employees and operations:
- Encourage telecommuting if possible. Otherwise, extend paid sick leave or allow employees to use vacation days
- If your teams must work on-site, have everyone wash their hands frequently using soap and water. Ideally, you should disinfect all keyboards, doorknobs, elevator buttons, and anything else that gets touched on a regular basis
- It’s a good idea to space employees farther apart. The Centers for Disease Control and Prevention (CDC) recommends keeping a distance of 6 feet8
- Set up “no-touch” receptacles throughout the office so employees can dispose of trash without coming into contact with any potentially infected surfaces
- If any employees show signs of illness, send them home right away. Don’t allow them to come back until they’re 100 percent symptom-free for several days
Last but not least, you should regularly monitor the latest CDC guidelines. It even has a dedicated workplace pandemic guide for employers.
Need Business Support Throughout the Coronavirus Pandemic?
In this time of social distancing, many businesses will be struggling to stay afloat for the near future and will need to move to alternative payment acceptance methods to help generate sales for goods and services.
To reduce contact and help minimize risk for you and your customers, consider these payment alternatives:
- Virtual Terminal – Accept payments over the phone or via mail by logging into your dashboard to manually enter credit card details to complete a sale
- Contactless Terminals – Eliminate the need for your customers to physically touch PIN pads and credit card readers by enabling NFC payments for contactless cards and mobile wallets like Apple PayTM, Samsung Pay, or Google PayTM
- Mobile POS – Take payments on deliveries, at curbside, or wherever your business takes you with mobile credit card processing
With all of these concerns on your mind, please know we are here to help support your operations and enable you to accept electronic payments from anywhere at any time.
Visit our COVID-19 Small Business Resource Center to:
- See videos on how to keep terminals and POS systems clean
- Access links for financial relief
- Read helpful tips for managing anxiety
- Learn of apps to help your business