Tue. Oct 26th, 2021

Coronavirus Economic Impact Updates

The failure of the US to bring Covid-19 cases under control is driving up the company’s expectations of a rapid economic recovery, forcing companies to review plans and forecasts, while also struggling with a new federal vaccine mandate.

According to an Economic Innovation Group, revenue has fallen in a quarter of U.S. small businesses over the past three weeks, while only 8 percent has experienced revenue growth study. A growing minority now expects a full economic recovery to take more than six months.

The country’s largest airlines this week revealed a slowdown in demand as cases of the highly contagious Delta variant increased. United Airlines had its capacity plans for the most important Thanksgiving and Christmas holidays, and American Airlines and Delta Air Lines saw lower-than-expected revenue in the quarter.

While executives began waving after investor conferences after Labor Day, several said the Delta variant brought uncertainty and volatility into their forecasts.

‘We did not provide guidance for [2021] because there is just so much uncertainty, ”Craig Menear, chairman and CEO of The Home Depot, told one investor event. “How this Delta variant plays out is unknown.”

MGM Resorts said there were more cancellations of business trips during the week, while Tracey Travis, chief financial officer of Estee Lauder, said at a Barclays conference that a delay in its forecast in the first quarter was ‘mainly’ [due to] the Delta variant ”.

When asked by an analyst about the disruptions the rail operator CSX has experienced in recent weeks, from Delta storms to hurricanes to chain disruption, James Foote, its chief executive, replied: ‘Well, I’m waiting for the meteor to strike and the locusts will come, and then we can discuss what the fourth term is going to look like. ”

Similar uncertainty led Microsoft to rule out the postponement of the return of staff to its U.S. offices indefinitely this week and to join a list of major employers pushing their reopening of their office beyond their original Labor Day targets.

The number of S&P 500 companies lowering the earnings ratio rose from 37 to 47 between the second and third quarters, says John Butters, senior earnings analyst at FactSet, although he stressed that it remained below the five-year average.

Coronavirus Business Update

How does coronavirus claim its market on markets, businesses and our daily lives and workplaces? Stay informed about our coronavirus newsletter. Sign in here

According to Oleg Melentyev, credit strategist at Bank of America Securities, the economy was still in a recovery mode, but the more cautious state of mind led to a ‘significant reassessment’ of the growth outlook.

“During the summer, expectations changed from a full reopening that caused a strong and sustained recovery, to what now looks like a prospect for a much slower and uneven one,” he said.

Jesse Wheeler, an economic analyst at Morning Consult, said consumer confidence had ‘dropped significantly’ since early July, leaving most of the year’s profits to return to the levels last seen in February.

“We can say with confidence that the Delta variant is the main driver, as the beginning of the decline in confidence corresponds exactly with the latest increase in cases,” he said.

Although the polling station firm experienced some improvements last week, the percentage of workers said they felt uncomfortable about returning to offices jumped 9 percent to 43 percent.

The turnaround comes in confidence because the Biden administration wants to accelerate the reopening of the economy by setting up vaccines or weekly tests for 80 million private sector workers before they can return to their workplaces.

President Joe Biden’s announcement Thursday was welcomed by several industry groups representing large employers, who see vaccines and tests as a way to protect staff and wanted clearer federal leadership at a time when some Republican governors are threatening to fine businesses which compels vaccines.

However, some smaller businesses are expected to resist this. The National Association of Manufacturers said all vaccinated Americans are “an economic necessity”, but warned against “unnecessary compliance costs” that employers tax.

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *