COVID-19 and Its Impact on the Global & Local Economy
Historically, it is not uncommon for epidemics to impact the global market by slowing production of goods, disrupting supply chains, or lessening the capacity of an able-bodied workforce. However, COVID-19 is not an epidemic, it is a pandemic; and while private and public sector leaders are working diligently to address the crisis, it is evident that businesses are suffering.
As we consider recent epidemics in comparison to COVID-19, we must consider the context of their economic impact. For example, at the time of the 2002 SARS epidemic, which broke out in the Guangdong province, “the GDP of China represented 4.31% of the world GDP” whereas now “China represents about 16% of the world GDP, an almost four-fold increase.”
According to a Reuters poll conducted in February of 2020, this pandemic is expected to have an even more critical impact on the Chinese economy than the SARS epidemic and the global economic recession of 2008.
Additionally, the expanse of this pandemic versus historic epidemics should be taken into consideration. COVID-19 is spreading quickly and there is still uncertainty around how the virus spreads and how to treat the virus. Whether this spread is an inevitable result of globalization or the extreme contagious nature the virus possesses, the global reach will uniquely effect industries. In the early stages of the viral spread, there were concerns about the Chinese supply chain, but companies with diverse procurement sites had reason to feel secure. As the epicenter has now moved to other south-eastern Asian countries as well as Europe, experts predict that COVID-19 will impact production and distribution for manufacturers in months to come. According to the latest CNBC Global CFO Council survey, “40% of companies …expect supply chain issues could take between three and six months to get business back to normal once the issues end.”
Slowing the spread of COVID-19 is the immediate priority, but the impact of this pandemic will not cease once the contagion is controlled. The global economy is going to experience the impact of this pandemic for months and even years to come.
So, what does this global pandemic mean for Greater Louisville manufacturing and logistics companies right now?
Already, we have seen the job market impacted most immediately in the food service, retail, and hospitality industry with government mandated shutdowns. The next industry in crisis could very well be manufacturing. Approximately 21% of jobs in Greater Louisville’s economy are in manufacturing or logistics, which is now threatened by the COVID-19 pandemic.
Many large, international manufacturers have halted productions, such as Ford, Tesla, Apple, and Boeing, while retaining employees and in many cases providing 100% paid leave. However, small and medium sized businesses may be forced to temporarily close doors and furlough or displace employees without pay as a result of financial strain.
If you or your employees need assistance filing for unemployment insurance benefits, please use the following guidelines.
- If your company has 100 or fewer employees and you're laying off fewer than 25 people, your employees should go here to file a claim.
- If your company is larger than 100 employees and you're laying off 25 or more, you should file an E-Claim to avoid each employee filing individually. To receive more information on E-Claims, contact the E-Claims team at UIeclaims@ky.gov or 502-564-2369.
The Office of Unemployment Insurance is encouraging all to apply online and to beware of scammers; always ensure there is a ky.gov extension. Have more questions? See this FAQ sheet.
GLI is working with our partners to match HR professionals at companies experiencing layoffs with leaders at companies who are hiring to proactively move displaced workers to new opportunities. If you would like to speak to someone on our team directly about matching your workforce needs, click here.