Taplow Group – Pandemic Business Overview
The Taplow firms have been active throughout the pandemic. This is the Ninth update in our Business Updates series from our partners around the world.
Working from Home: Many countries have again encouraged office workers to work from home. This is having an adverse effect on the hospitality sector and ancillary sectors.
Employee welfare: With the ramping up of testing, many are experiencing the need to self-isolate, bringing additional economic stress to employees and employers, alike. Companies must have a clear strategy regarding the employees who are self-isolating and their businesses.
Geopolitical affects: There is an urgent need for Governments around the world to act quickly to address spikes and upturns in the pandemic. Business decisions taken one day are neutralised the next day by government strategies, forcing business leaders to act with nimbleness and clarity.
Australia continues to recover from its COVID-19 economic setbacks. One region in Australia, Victoria, experienced a major second wave of COVID-19 that resulted in a severe shutdown of that region and making the other Australian regions excluding any travel from this region. All other regions in Australia are progressively emerging from the “Big Government” management of the community, the health, economic and financial regulation, and influence.
Tourism and hospitality sectors have been severely impacted. Government financial support for “Job Keeper” and “Job Seeker” is being revised and wound back and additional investment is being made in sectors of high potential employment and economic growth.
Forecasts for agricultural production are strong and produce prices are holding firm. Mining and Resources are continuing to perform strongly. Infrastructure and construction sectors are investing, and many projects are underway and numerous others are being forecasted.
There has been a review of the Foreign Investment regulation in Australia. The A$ has strengthened against the US$ and is holding relatively firmly. The equities market have continued to improve.
There has been a large reduction in consumer debt on credit cards over the past two quarters. Volumes of parcels through the Australia Post business have been at a record levels for many months as Australians have embraced online consumer behaviour.
According to IDC's Worldwide Artificial Intelligence Spending Guide forecast, India's Artificial Intelligence (AI) spending is set to grow at 30.8% Compound Annual Growth Rate to USD 880.5 million in 2023. This is largely due to the fast adoption of AI and cloud technologies for intelligent solutions to transform businesses and gain competitive advantage.
NITI Aayog and Embassy of the Netherlands signed a Statement of Intent for decarbonisation and energy transition agenda, which aims at creating a platform that enables key stakeholder’s collaboration to develop innovative solutions for sustainable development.
India’s GDP growth is expected to grow in the range of 6.0 to 6.5 per cent in 2020-21. GDP growth moderated to 4.8 per cent in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
Business to Business (B2B) tech start-ups are driving tech adoption in India. There are over 4,200 B2B tech new businesses in India.According to a study by NetApp and Zinnov, 63 percent out of these are taking a shot at big business innovation in the banking, financial services, insurance, medical care, retail and car verticals.
Radware, a leading provider of solutions for cyber security and application delivery, and Bharti Airtel ('Airtel'), the largest integrated telco in India, today announced a collaboration under which Airtel will provide enterprise customers with Radware's Cloud DDoS Protection, Cloud WAF, and Bot Manager cloud security services.
A new report said on Friday that online food is going to be the next battlefield for growth, growing to over $18 billion by 2024, as businesses from Reliance to Amazon put their top dollar at your doorstep in serving regular groceries.
Hildegard Wortmann, who is responsible for global sales and marketing for Audi AG has stated that the pandemic has peaked out in many countries and they are coming back to normal in terms of business. A recovery is recognisable from worldwide incoming orders, which are now only slightly below the pre-corona level. She expects the festive season in India to drive sales momentum before industry revives in 2021. Launching a new mid-term plan - "Consistently Audi" she says the focus on India will be quality over quantity and driving sustainable business.
Conde Nast has launched its technology lab in Bengaluru. The company plans to recruit ~60 people in 2020 and >300 people by the end of 2021, to design and build the next-gen digital content platforms across its media brands portfolio (including Vogue, GQ and Architectural Digest).
General Atlantic announced it will invest Rs 3,675 crore (US$ 498.58 million) in Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries, to drive transformative growth in the retail sector and accelerate India’s position in the global digital economy.
Singapore will continue to provide a business-friendly environment for international companies and workers to operate in, while ensuring a fair and level playing field for Singaporeans, Trade and Industry Minister Chan Chun Sing said in a Facebook post on Oct 2. Mr Chan noted that the issue of foreign manpower and the role they play in Singapore's economy have "attracted much attention" over the last few months, and that "it has not escaped the notice of our international business community." Responding to these concerns, Mr Chan assured that Singapore remains committed to being open and connected to the world. He also recognised the role that international companies and workers have played in growing Singapore's economy and intend to continue to ensure Singapore provide a business-friendly environment for them to operate in.
Singapore’s factory activity expanded for the third consecutive month, after five months of contraction amid the COVID-19 pandemic. The Purchasing Managers’ Index (PMI) for September recorded a “faster expansion” at 50.3, up 0.2 point from the previous month. Despite continuous weak employment readings, manufacturers are becoming more optimistic and in anticipation of the next reopening phase for all businesses.
A series of industry-specific human resources (HR) playbooks is being developed to guide HR professionals to address and solve challenges specific to their sectors. The Manpower Ministry and the Institute for Human Resource Professionals are working together with sector agencies and HR experts to curate best practices, tools and practical use cases for these playbooks. The goal of strengthening the HR capabilities of organisations to support business and workforce transformation. The playbooks will first be introduced for the finance and food services, before being expanded into other sectors.
There have been few community cases of COVID-19 during the second week of New Zealand (excluding Auckland) at Alert Level 1 (freedom to do anything but the need to be aware). A large number of cases were reported on 1 October, though all of these were in managed isolation at the border.
The bounce-back out of the first lockdown was vigorous, but much of it reflected one-off sources of spending: pent-up demand from when the shops were shut, and holiday budgets being spent on spas and e-bikes. Business confidence, consumer confidence and even weekly spending were all running out of puff before COVID reappeared. Remarkably, business sentiment measures have improved after the return of COVID, but they do remain at recessionary levels.
ANZ Bank estimates that the loss of international tourism and the foreign student industry wipes out about 5% of the economy, with the flow-on to retail and hospitality making it worse, and the fact New Zealander’s can’t flee for warmer climes in winter providing an offset. And unfortunately, the sectors most impacted by this shock are the people-centric ones: tourism, hospitality, and retail. The hit to employment is going to be correspondingly larger than it would be if the shock to GDP were to agriculture, for example. That means that while there is a lot of uncertainty, it looks likely that the unemployment rate will rise meaningfully higher than it did in the 2008/09 recession.
The worst affected industries include accommodation and food services (down 4,913 jobs) and transport, postal and warehousing (down 6,092 jobs). These service industries were most affected by border closures and higher restrictions imposed on hospitality at higher alert levels but have partly recovered in recent months.
In its growth forecasts for the next five years, the French government expects to return in 2024 to the level of activity that France would have had without the Covid-19 pandemic. After this year's recession and the strong rebound of 8% of the GDP expected next year, the French government is expecting a return to the same level of activity in 2024. The following year, growth would still be sustained: it is expected to reach 3.5% in 2022. The Ministry of the Economy hopes that during 2022, GDP will return to its pre-pandemic level. Then, logically, growth would gradually return to its cruising speed. It would be 2% in 2023 and 1.4% in 2024.
However, France, like its European neighbours, will face a difficulty; inflation will remain very low and even disappear in the short term. The consumer price index, excluding tobacco, is expected to rise by only 0.2% this year and then to rise very slowly, to 0.6% in 2021, 1% in 2022 and 1.4% in 2023. In September, the consumer price index rose only 0.1% year-on-year. Low oil prices and the appreciation of the euro contribute to this low inflation but are not the only drivers. The main explanation is that the crisis has, at least in the short term, a deflationary effect. The loss of activity leads to an increase in unemployment, which weighs on wages, consumption and therefore prices.
The repercussions of the health and economic crisis are expected to be massive on the job market in France. The unemployment rate is expected to be "around 9.5%" of the active population by the end of 2020, 2.4 points higher than mid-2020 and 1.4 points higher than a year earlier, warns the National Institute of Statistics and Economic Studies (INSEE). The salaried employment "would be almost stable in the second half of the year", according to INSEE, after a drop of 715,000 jobs in the first half of the year, adds the institute in its economic forecast.
In August 2020, the private sector lost 10,600 jobs, according to the results of the National Report on Employment in France by ADP. "COVID-19 continues to impact employment in France," said Ahu Yildirmaz, Vice President of the ADP Research Institute. "The August report shows that business services, trade and financial services are the most heavily affected, even though all sectors have recorded job losses," she said.
A news quote from a few weeks ago says that “the Finnish economy emerged from corona spring as EU winner, most economists say the worst is over”.
Seasonally adjusted GDP fell by just 3.2 percent in the second quarter compared to the previous quarter. On average, EU countries’ GDP plunged by 11.7 percent between the first and second quarters of this year.
However, going to the second wave, the technology industry foresees the biggest impact. There is low demand in export resulting in empty order books.
New assignments have been coming in since the end of June from different areas – Construction, IT, Medical, Public sector. The positive trend has been confirmed by additional client requests and meetings related to
A Chinese company interested to start business in Europe
The owner of a German tech-company looking for a successor and guidance during the succession management process
Business in Norway is looking good at the end of Q3. For Taplow this results in new assignments from existing clients, as well as business with two new clients.
Taplow Norway has signed a contract with a new consultant in the Life Science sector.
Regional lockdowns continue to roll out across the country to counteract the spike in the virus in the past few weeks.
The furlough scheme ends in October and the Government has introduced a replacement scheme that will be active until April 2021, but a rise in unemployment is expected.
The Government suspended its annual budget review for Q3 2020, to focus on developing actions as the pandemic fluctuates.
Although Brazil is entering a documented stability period, on a slighthly pointing down curve in both, new infections and death cases, the country is still seeing high pandemic figures – a daily average of 693 deaths/140,700 in total and 28,000 of new daily cases of infection/4.7 million in total. 14 states in the Northern-Northeastern, Southern and Westcentral áreas of Brazil are considered actual áreas of stability with slight reduction of deaths and new infections. 9 states in the Southern, Southeastern, and Westcentral areas are in the reduction mode. 3 other states, including Rio, are in the growing cases mode. Most of the commercial, services and industrial activities were reopenned in the country under strict safety precautions, such as the reduction of working/service hours, reduction of people involved, social distancing, the obligatory use of masks, hygiene measures, etc.
65 million of officially unemployed, informal workers are being granted an “Emergency Aid” for 6 months, July-December 2020, amounting to nearly US$800 each. This social measure has brought substantial relief for those unprotected extracts and is helping the general economy, via consumption of goods and services.
Initial forecasts pointing to a -9.5% of GDP rate for 2020 has been reviewed and updated to a lower figure between -5%/-6%. Economic reforms such as the Fiscal and Administrative (govern spendig areas) are currently under negotiations between the Government and Congress.
USA and Canada
US business is more impacted by the political situation than by the economic and virus issues. Companies are reluctant to make major hiring decisions. Looking internally is more prevalent and even with the pressures to recruit more diverse populations, many of the larger firms are still reticent to not hire “friends and family”.
As we are introducing “Assured Diversity” to more of our clients and prospects, we are beginning to see a flicker of interest in using this time to become acquainted with more diverse prospective candidates for senior roles.
We hope that you, your family, and work colleagues continue to stay healthy and safe. We at The Taplow Group are here to support you and your company through this crisis and beyond. We will be back with another set of updates soon. Till then, take care and stay safe!