The coronavirus outbreak that originated in China last year has already created a ripple effect across the global supply chain. With the United States heavily reliant upon Asian manufacturing, the long term economic impact of coronavirus has yet to begin. The long-term impact on the economy is still unknown, but based on some early indicators, it isn’t pretty.
What is coronavirus?
Coronavirus is a virus which causes diseases in mammals and birds, and currently has affected over 17,000 people to date. The current outbreak involves is tentatively named virus 2019-nCoV, causing respiratory infection, believed to originate from bats in a large seafood and animal market in Wuhan.
What are the early economic indicators?
The Chinese government is shutting down exports to help contain the spread of coronavirus. And that’s where the bad news begins. An economic disturbance to the world’s largest exporter impacts everyone from the assembly line to transportation to the store shelf.
Wuhan, located approximately 500 miles from Shanghai, is an important industrial hub for the steel industry. Automakers like Nissan, Honda and GM, in addition to corporate manufacturers like IBM, Honeywell & Wal-Mart expect delays in manufacturing.
China is also the world’s largest oil importer, with the city of Wuhan being a crucial oil and gas hub. Shutting off the spigot to China alters the landscape across the planet. On top of that unemployment and inflation will most likely spike, creating a longer term impact on the economy.
With an uncertain future, this should be a wake-up call for corporations to develop alternate sources for manufacturing in other regions of the world.
Our partners at ExpressTruckTax have a direct line to the truckers moving across the country and we understand the tremendous concern that’s resonating throughout the industry.
In some way, we’re all indirectly affected by this terrible tragedy. From SPAN Enterprises and PayWow our thoughts are with everyone being significantly impacted by this horrible situation.