As the novel coronavirus spreads outside of China and countries around the world try to protect their citizens from the outbreak, the full impact of the virus is becoming more apparent. In less than a month, there have been hundreds of deaths and tens of thousands of people infected globally. To combat the spread of the virus, China has moved swiftly to identify the reservoir, communicate with other nations, extend the Lunar New Year celebration, and ban travel in and out of 14 cities, among other measures. These precautions have most likely prevented the virus from spreading further but have impacted businesses globally as they struggle to navigate uncertainty.
To assess the global business impact of the outbreak, Dun & Bradstreet has created a special briefing report: Business Impact of the Coronavirus. The purpose is to help companies with ties to the impacted regions assess the potential impacts to their businesses and supply chains, as well as the economy at large.
Business Impact in China
According to the report, the range of businesses impacted is vast, but a few industries standout.
Service – Under normal circumstances, Lunar New Year is one of China’s largest and most profitable holidays. Due to the outbreak, the Chinese government postponed the end of the holiday to prevent mass gatherings and prevent further spread of the virus. Between impact to holiday celebrations and restrictions on travel, service providers in China are experiencing strain.
Manufacturing – Equally impacted by the travel ban, manufacturers are struggling to get raw materials to their facilities and product to customers. In addition, many manufacturers will have to delay reopening of their facilities because of quarantines and travel delays detaining workers.
Wholesale – Like manufacturers, wholesalers in affected areas are finding it difficult to get their products to their customers. They may also be impacted if their suppliers struggle with the staffing concerns mentioned above.
Additionally, most businesses in the impacted region are micro businesses with less than 10 employees and small businesses with less than 100 employees. These companies will most likely be more severely impacted by the crisis and could have a harder time recovering once the outbreak is contained.
Impact to the Global Supply Chain
Companies outside of China are being affected as their Chinese suppliers are unable to deliver product and materials. To compound the issue, many suppliers outside of China rely on suppliers in China to fulfill their obligations to their customers. If the outbreak continues, it is likely that the impact to businesses globally will grow and that companies around the world will experience strain as their Chinese partners in the service industry are unable to make payments on invoices.
By identifying the risks ahead of time and working to find a solution, companies globally can protect their supply chains and create contingency plans quickly. Open communication with both suppliers and customers can help maintain those relationships and ease the uncertainty during the outbreak.
The complete report on The Global Business Impact of the Coronavirus analyzes:
- The number of active businesses, including branches or subsidiaries of foreign companies and corporate headquarters, in the impacted Chinese region
- The number of companies and Fortune 1000 companies globally that have one or more Tier 1 or Tier 2 suppliers in the impacted Chinese region
- The percentage of affected industries within the impacted Chinese region
- The economic effect of the coronavirus outbreak as compared to the effect of both the SARS and Zika virus outbreaks on global and local markets
- Two different scenarios around containment and the predictive impact for both
To get the full Business Impact of the Coronavirus report, including best practices for how to protect your supply chain, please click below.