Coronavirus Economic Effect on Supply Chain: We’re Not All on the Same Page

How bad is the Coronavirus effect on the global supply chain and economy? Depends on who you ask.

When it comes to the global economic sentiment, we're not all on the same page. The level of optimism for economic rebound over the next 6 months is interestingly fickle, varying by region and by industry.

Our experience here at Blue Ridge is that companies are freaking out -- either because demand is extremely weak, or because it's going haywire and they don't know which end is up. There's nothing in between.

Economic Sentiments

McKinsey & Company has been putting out monthly surveys throughout this whole thing. In their latest survey conducted May 4-8, they reported that:

• In Greater China (April and May), 75% expect conditions to improve in the next six months, up from 63% previously
• But only half of that share – just 34% – say the same in Europe
• That figure in North America is 48%
• Over the last month, India reports the largest shift toward positive sentiment

Managing the Next Normal

One thing we are all on the same page about is, “That’s gonna leave a mark!”

Looking into "the next normal," the data found that weak consumer demand is the biggest threat to companies’ growth over the next 12 months for the industries surveyed, especially in:

• Pharma & medical products (23%)
• Chemicals (46%),
• Consumer and packaged goods (48%), and
• Automotive (52%)

Supply chain disruption was a close second for biggest potential risks.

Learn what distributors in every industry are doing to build resilience for future supply chain disruptions:

7 STEPS TO SET UP YOUR SUPPLY CHAIN MANAGEMENT ‘NEW NORMAL’