The Financial Times studied the impact of COVID-19 on business activity.
Misinformation is everywhere, as restaurants, cinemas and shops around the world have needed to stop amid the outbreak of the novel coronavirus, it has been very hard to follow up con genuine data regarding industry blows and even certified deaths because of the virus.
And as economic activity is slowing sharply and some experts even assure that a recession has already begun, the Financial Times (FT) has compiled a set of alternative, high-frequency measures of economic activity for different sectors which give an early indication of what to expect when official data start to become available in the coming weeks.
For example, vehicular traffic has at least halved in many of the world’s largest cities, as well as spending in restaurants has halted and cinemas sales amid nationwide lockdowns across Europe, the US, and the world, representing giant losses, especially in leisure activities, travel, and energy use. This is the breakdown according to FT:
As global restaurant demand and other leisure activities have ground to a halt, the industry is now more worried than ever.
Jian Chang, economist at Barclays, said that in China services sectors such as entertainment, hotels and catering services “have been hit hardest” and that services activity “shows signs of a longer contraction than for manufacturing”.
“The debate about the economic impact of the coronavirus has moved on from concerns about supply chains and damage to manufacturers to the effects of widespread shutdowns and self-isolation on the services sector,” added Jennifer McKeown, head of the global economics service at Capital Economics.
Cinemas, for example, are hurting, as on the weekend of March 15, cinema bookings shrank by at least two-thirds compared with the same period last year in most of the more than 50 countries for which data are available, according to an FT analysis of data from Box Office Mojo, a website that tracks box-office sales. Just US cinemas took in $US75.8 million ($131.6 million) in the seven days to March 16, less than half the $US190.3m they took in the same week the previous year.
Travel, flights and vacations
With mounting travel restrictions in all major economies, travel and tourism “is in a fight for survival”, said Gloria Guevara, president of the World Travel and Tourism Council. Many tourist-dependent economies face “an existential threat”, she said.
Among flights, the global numbers were down by more than 20% in the seven days to March 21 compared with the same period in the previous month, according to data from flight-tracking service Flightradar24, reflecting the collapse of travel and tourism as a result of the pandemic. Road traffic has also fallen in most major cities, according to a traffic index compiled by satellite navigation company Tom Tom which measures the time that users of its services spend in traffic.
Energy consumption is significantly lower across Europe and China. In Europe, per the FT, the drop-off in electricity consumption was first noted in northern Italy, where it was down by 15 per cent on March 18 compared with the same day of the week in mid-February. In China there has been some recovery from the peak of the crisis, but power plant coal consumption is still down by 30 per cent compared with the start of the year.
Peter Osbaldstone, research director at Wood Mackenzie, a global energy consultancy, said that “further demand reductions are expected [around the world] as lockdowns become more widespread”.
“Looking at the data across various sectors of the US economy, it appears we could be headed for the most severe contraction in consumer spending on record,” said Gregory Daco, chief US economist at Oxford Economics.