The world as we know it stands at a halt due to the novel virus that has taken the global economies by storm and with surprise, with most economies expected to plunge into a recession by the end of this year the amount of loss borne cannot be estimated nor calculated; there is no one particular sector that can be said to have borne the most loss as every sector has shared their fair amount of loss, however, the sector that has suffered the most globally in the manufacturing sector. The manufacturing sector as we know it stands still. It has taken the biggest impact due to the novel virus as governments across the globe press upon social distancing which is known to be the only effective measure against this virus, however, social distancing has also confined people to their homes which deprives the manufacturing sector of one of its biggest resource, labor, making not only difficult for companies for to produce but also to survive.
The second most affected sector is the retail sector, while it can be argued that the retail sector has not borne a great loss, but the fact that the entire retail sector has reshaped and adapted to the new business model cannot be ignored. While the argument of such stands that physical retail business has suffered a great downfall however the online business better known as e-commerce has soared exponentially allowing for more businesses to emerge. In contrast, existing businesses that failed to adapt to the new model do take a blow.
The manufacturing sector is a major part of any economy thus governments across the globe primarily focus on engaging people to work in this sector and creating new policies to provide ease to companies, subsidies and tax reduction are a few to name, however, due to the emergence of the novel virus the sector stands at halt causing to a great impact to the economy of a country leading to an impact on global economies. To further study the impacts on the manufacturing sector one must study the impacts individually on the food industry and medical equipment industry, which come under the manufacturing sector, at the start of the spreading of virus and how they hold up today.
The novel virus affected the food industry to a great extent as governments across the globe imposed social distancing to fight with the novel virus depriving the industry of labor; however, that was not the only issue, the ripple effect of plummeting economies caused the dollar rate to rise in many countries, which made the raw material expensive causing a huge toll on the profits of the industry, with a restriction on labor and due to expensive raw material food industry was affected greatly furthermore, with people confined to their homes and restaurants along with shops closed the demand had fallen substantially which also took a huge toll on the industry.
Now with the ease in restrictions and SOPs provided the industry has regained one of its biggest resources, labor, furthermore with ease restrictions the demand has also increased as restaurants are now allowed to operate along with the supermarkets
for a particular amount of time, however, the costs continue to rise as raw materials are still expensive due to dollar rate and restrictions on transportation. However, the overhead costs remain the same, which also affects the profits greatly.
MEDICAL EQUIPMENT INDUSTRY
The medical industry has emerged and become one of the industries holding the most importance in this novel virus's presence. In contrast, the other industries plummet due to the inevitable reasons, the medical industry has risen exponentially as the demand for medical devices and other items such as hand sanitizer, gloves, and masks continue to rise. The governments now urge such companies to produce as much as they can to meet the inflated demand for such items; however, the novel virus has also left a huge impact on the transportation of raw material which makes the task challenging furthermore with social distancing guidelines, the number of labor has also fallen which provides no ease in completion of the task, yet the demand continues to rise which contributes in favor of the industry while other industries can the demand graph falling; furthermore, the risen costs to some extent are forwarded to customers by increasing the cost of the product, so the industry bears yet small loss compared to other industries.
Also read about: What are the Best Espresso Machines under 500
The retail sector is also one of the most important sectors of an economy as an individual nearly everyday visits facility conducting such type of business, not only for the economy but also for the citizens of a country retail business holds great importance which cannot be denied nor ignored, however with the spread of the novel virus retail business has been too affected greatly, restaurants, drug stores, and supermarkets all closed or allowed to work only in a specific amount of time assigned by the government to ensure the social distancing. However, in this virus, e-commerce has emerged and proved to be very successful in terms of financial profits and in maintaining the measures while operating within a cautious environment. To further study the effects, let's first study how drug stores, superstores, and salons have been affected, followed by how e-commerce has emerged as a solution to the industry's major problems.
Drug stores in the midst of the novel virus have been labeled as a place of great importance as not only are they providing medicines but also means of protection in the form of masks, gloves, and hand sanitizers; furthermore, drug stores were and are still allowed to work within specific times which helps them meet the demand; however, the profits have declined greatly as the product has become expensive due to added costs by the company and transportation charges thus the profits have fallen greatly followed by overheads which also take a toll on profits; however, the increased demand cannot be ignored and thus help the drug stores stay operational as the number of goods being sold are more with some profit overall increasing the profit or maintaining them enough for drug stores to stay operational.
Similar to drug stores superstores too provided necessities of life, however at the starting of the spread of this novel virus, a wave of panic buy was observed as at first superstores were not allowed to stay operational due to the social distancing measures which caused a spike In the profits of superstores as everything was bought, however when the virus was at its peak, superstores took the biggest impact as they were shut down, all of the overheads continued to pile up. In contrast, the source of profit was closed, rent, salary, and utility bills are to name a few of them. However, superstores are now operational providing people with utilities and meeting demands and their expenses with some ease in restrictions. Still, restrictions on transportation continue to linger and people visiting superstores less than normal also takes a huge toll.
Unlike drug stores or superstores, salons are for merely cosmetic purposes which are not included in the necessities of life, thus at the beginning of the novel virus salons were ordered to shut down at all by the governments following the social distancing protocol thus the overhead costs, for example, rent, utility bills, and labor costs tumble down upon the owners. However, in countries where the rate of spreading of the virus has declined, salons are now permitted to stay operational within specific timings, which is now helping them meet demands.
One of the now major key business which has emerged in midst of the novel virus is e-commerce, as governments implemented protocols to ensure social distancing people turned from visiting physical stores to e-commerce stores as e-commerce took advantage of the current situation and adapted to fulfil the needs of the people, while people who were not aware of such ways also joined hands with different platforms to provide people with necessities of life, a key thing in a e-commerce platform is warehouse, which people already had in the name of shops, the only problem was to deliver things to people, which was resolved by e-commerce platforms, the people introduced things as little as grocery to as big as expensive phones, this platform was also appreciated by people as things came to them either at the same price or at a little more while safety was not being compromised!, however overhead charges were incurred, offices had to stay closed and SOPs for having less employees work was also implemented yet even then the business proved to be successful. The last aspect that is important one can set up an online business by using Online Business Tools and get the right traffic and sales volume.
The measure of loss cannot be calculated, as within manufacturing sector product costs along with the period to some extent take a toll, due to raw material and providing employees with wages, fixed and variable costs are also a matter of concern and with the dollar rate rising the costs are now more than they have ever been.
The food industry suffers from the same as product cost along with period costs are increasing both direct and indirect costs are also increasing, however for medical equipment industry period costs lessen. In contrast, product costs increase, the direct cost stays the same whereas indirect increase, along with a slight increase in fixed, mixed, and variable. In the retail business, the period costs take more toll than product costs; indirect costs are more than direct costs, fixed costs, and fixed costs are being borne more than variable costs.
Drug stores face an increase in fixed and variable costs, followed by increased product costs and direct costs with some increase in indirect cost, with supermarkets facing the same. however, in-salon period costs are a matter of concern, and indirect costs are followed by fixed costs, whereas no change in variable and mixed cost is observed. E-commerce, however, faces an increase in period costs and indirect costs followed by fixed and variable costs.