There is some genuine concern now over the H1N1 virus. Fact, this is nowhere as deadly as the H5N1 which ravaged HK and most of Asian economies. H5N1 has a mortality rate of 58%, while the newer strain is not as deadly. There is sufficient antiviral for the new strain unlike the scramble for H5N1. Experts predict that during a pandemic up to 30% of the global workforce could either be off work due to sickness or stay away due to fear. Absence levels at the expected rates would cause severe problems. The economic impact of H1N1 is more global tha H5N1. If conditions worsen, the impact will initially appear in two primary aspects of business. The first will be the availability of the workforce, the second and more unique impact will be in the market place.
Left unchecked, real estate values would be slashed, bankruptcies would soar and the insurance industry would be decimated. Naturally airlines would be one of the most directly impacted, followed by the tourism sector, in particular economies that are heavily dependent on tourism such as Australia, Thailand and HK.
Business are better prepared nowadays, especially in Asia. Many have planned for workers to work remotely from home where possible. More indoor time will naturally slow the flow of money and the service industry will be affected as well.
How the businesses will be affected will depend on how long the impact will last. If the fear conditions persists, we could see about 20%-50% of revenue for most companies being affected if high-alert persists for at least 6 months. During such an extended high-alert period, its best to stay cashed up, pay down all bills and reduce your leverage. Not a time to buy a property.
Hence property developers will be back to where they were 9 months ago if the high-alert conditions were to worsen further. The trade for livestock will again take on a highly protective shield.
What businesses can do is to have contingency plans: do you already have surgical masks at work for staff who may be coughing or seems to be slightly sick; do you have plans to get staff to work remotely from home to sustain the on-going critical services; do you have plans when only 50% of your staff is available; what about 30%; etc.
While the current strain is not as devastating, the entire issue could snowball into extreme fear and crushes confidence - not good for any economies at this juncture of recovery. We are not there yet, but one should know what precautions to take, and how to cash out properly and swiftly when things take a turn for the worse.
p/s photos: Kim Ah Joong
Title: Economic Impact Of H1N1 Should It Worsens
Posted by:Iwanr
Published :2009-06-24T18:42:00-07:00
Rating: 3.5
Reviewer: 5 Reviews
Economic Impact Of H1N1 Should It Worsens
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