The impact of coronavirus (COVID-19) on businesses worldwide as well as the Chinese provinces is gradually changing economic activities, based on a new study.
More than five million businesses worldwide would be affected by COVID-19, according to a special briefing issued by global data analytics firm Dun & Bradstreet. The Chinese provinces affected by the pandemic are interconnected with the global business network.
The report’s findings show that more than 90% of all active businesses in China are in the areas with 100 or more confirmed cases as of February 5, 2020. About 49,000 of these businesses are branches and subsidiaries of foreign companies.
Dun & Bradstreet reported that 49% of the companies with subsidiaries in affected areas are based in Hong Kong. U.S. companies comprise the 19%, Japan 12% and Germany 5%.
Moreover, around 51,000 global companies, 163 of which are in the Fortune 1000, deal with one or more direct or “tier 1” suppliers in the critical areas. At least five million have one or more “tier 2″ suppliers.
The top five major sectors on the Dun & Bradstreet were services, retail, manufacturing, wholesale trade, and financial services.
“No matter which scenario plays out, the Hubei region, China, and the global economy are indicated to see a churn in their business population and some lackluster employment and revenue growth in the near-term,” the company’s report states.
“When (not if) containment and eradication is achieved, factors within the impacted geography are bound to generate economic activity with consumers, satisfying pent-up demand once improved conditions are underway. The sum of the efforts to revitalize the region will place the global economy back on track for sustained growth.”
Economic forecasts
Moody’s reduced its global growth forecasts by two-tenths of a percentage point on Monday. G-20 economies are expected to grow at an annual rate of 2.4% in 2020 with China down 5.2%.
“There is already evidence albeit anecdotal - that supply chains are being disrupted, including outside China. Furthermore, extended lockdowns in China would have a global impact given the country’s importance and interconnectedness in the global economy,” Moody’s Vice President Madhavi Bokil said in the research note.
