Posted: 07 Apr. 2020 7 min. read

Fraser of Allander Economic Commentary - What this global crisis means for people, businesses and the economy

With the world in the middle of a global health crisis, the health implications, particularly for those families involved, are the most important concern. However this also represents a massive shock to the global economy.

In their latest Economic Commentary, the Institute says that this will trigger a recession for many countries and sectors. One expectation may be that the economy will bounce back relatively quickly, a so-called ‘v-shaped’ recession. However the Commentary notes that a more realistic assessment is that the recovery may take longer. Either way the unprecedented nature of the disruption to normal life means our economy is going to take a sharp downturn in the meantime.

To minimise the impact, policymakers have been making efforts to calm financial markets and help households and businesses through the crisis. We’ve created a summary of the funding initiatives made available for businesses as part of the UK Government’s COVID-19 response. Whilst detail is still coming through on many of these funding programmes, we have gathered information where it is available and aim to keep this updated as new information becomes available.

As well as the impact on their own employees, here at Deloitte we have seen a range of companies asking about how best to navigate such issues as business resilience, supply chain risk mitigation, financing and liquidity.

Business leaders are rightly concerned about how their companies will be affected and what they have to do next. The heart of resilient leadership: a guide for senior executives provides practical insights for leadership teams in taking appropriate action and sets out five fundamental qualities of leadership that distinguish successful leaders as they guide their organisations through the crisis.

A number of companies will now face weeks, if not months, of difficult trading conditions, pressure on working capital conditions and liquidity issues. Read here the difficult questions a business must ask itself.

Now is the time for companies to look ahead, to consider the improved and innovative offerings they can launch in the market now that will serve customer needs today as well as provide momentum into the future. By letting customers know you are there for them, keeping their interests first and foremost, companies can retain customer loyalty and trust. Read how to sustain customer loyalty in times of uncertainty.

Coronavirus is a truly global crisis and its economic implications will be felt by all. Businesses across Scotland, the UK, and the rest of the world are, for one of the first times in history, facing many of the same challenges. Now is the time for businesses to work together, to share skills, knowledge and expertise across the globe, because we all face this crisis and it is together that we will get through it.

If you would like to hear more on what the Coronavirus means for people, businesses and the economy, tune in to this podcast, where I join Professor Graeme Roy, Mairi Spowage and Emma Congreve from The Fraser of Allander Institute where we discuss what we might need to think about beyond this current crisis.

Please read the full Commentary here.

You can also visit www.deloitte.com/COVID-19 for more information and resources.

If you would like to discuss any elements of the report or have any comments, please do get in touch.

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