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COVID-19: recession types, recovery scenarios, behavior change.

What do the markets tell us?

Stock levels.

Of course, the business has taken care of the stock levels. Companies that use Chinese components have more stocks than at other times of the year. It’s possible that someone could change the supply chain. Technology will help to mitigate the impact of the suspension of work in China, but not fully compensate for it. So part of the world economy can work even in quarantine. It doesn’t cancel the negative effect, but it’s a way to reduce it.


And what happens to demand? Fear has reduced the demand for certain services. People stopped going to shopping centers, cinemas, etc. The demand for travel has fallen all over the world.

The overall effect is still negative, but it is weaker than in the past, thanks to Amazon, Netflix and online games. After all, people who are at home with their families all the time need something to distract them. So online commerce is gaining momentum. And the demand for networked computer games increased by 40% year-on-year (PRC).

Also, the growth of online shopping will reduce the impact of the epidemic on demand. The impact on the demand for this or that company depends on what it trades. Luxury brands suffer. But for basic goods, the transition to online shopping can be a long-term trend.


The coronavirus effect is to reduce the demand for resources. Decreased demand for raw materials such as copper can recoup losses as production resumes. This “accumulated” demand will support prices in the future. But with energy resources, it is not that simple. The canceled flight will remain the same. China is a large and not too efficient consumer of raw materials. China’s drop in GDP by $1 per capita has a more severe impact on global demand for resources than, say, a similar decline in GDP in the UK.

COVID-19: recession types, recovery scenarios, behavior change

What could be the recession caused by Covid-19?

recovery scenario after covid

All previous epidemics were V-shaped.

COVID-19: recession types, recovery scenarios, behavior change

The outbreak of Covid-19 has forced people to do things differently.

The coronavirus epidemic in the world can change entire industries and the way companies and consumers behave. Moving to online shopping can be a long-term trend, as can moving employees to remote work. Here are three ways to shift work, talent, and skills to where and when they are needed most.

1. Make work portable across the organization.

Many organizations, such as Allianz and Cisco, have already set up internal project marketplaces that break down work into tasks and projects that can be matched with people from anywhere in the organization with relevant skills and availability.

2. Accelerate automation.

3. Share employees in cross-industry talent exchanges.

Many companies are doing tasks they never could have imagined — e.g. Brooks Brothers and  New Balance are now producing surgical masks and gowns, while Tesla, Ford, and GeneralMotors produce ventilators from car parts after idling their automotive plants due to plummeting consumer demand.

Exactly smartPlan enables identification of workforce gaps in any dimension with automated gap-closing proposals. It is easy to integrate into skill management concepts.

There is hope that when the epidemic begins to decline, the fear of the virus will also go down. But there are three obvious long-term findings

First, global supply chains have a weak spot.

The development of technology was already pushing production to localization. The robot factory in New York is replacing the one in Shanghai where people work.

Second, people who had to work remotely might like it.

And companies will suddenly find that employees are doing a great job from home. Changing working habits will change the demand for office property, transportation and technology.

Third: growth in online shopping.

It has already taken place in most countries of the world. But people who will get used to online shopping in an era of the epidemic may not want to go back to the old method of shopping after the epidemic. The important point here is that economic data may not track it. If statistics underestimate online sales, consumer spending may seem to be less than it really is.

What’s the line on this?

After analyzing the data, we can make the following statements.

The extent to which the informal economy exacerbates the impact of the pandemic: Health care and the economies of countries with large informal economies are likely to be more adversely affected by the pandemic.

Prospects for low-income countries: the pandemic is severely affecting the populations and economies of the poorest countries.

Impacts on global supply chains: disruptions in global supply chains can exacerbate the shock effects of the pandemic on trade, production and financial markets.

Deep scars of the pandemic: it is highly likely that a deep recession would permanently damage investment, deplete human capital through unemployment and disrupt global trade and supply chains

More insights.

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