Countries That Rely On Exports, Manufacturing Faring Better In Pandemic
Companies that manufacture products are weathering the pandemic more easily than companies that sell services or experiences, The Wall Street Journal reported.
WSJ cited International Monetary Fund gross domestic product (GDP) forecasts that show how much different countries’ economies rely on the vulnerable service and accommodation sectors. GDP is a broad measure of a countries’ economic output.
Countries forecast to suffer comparatively steep declines in GDP in the next few years are, in order: Spain, Italy, France and Thailand. China, the United States, Turkey and Germany are among countries expected to suffer less economically, according to WSJ.
WSJ noted that the data seems to indicate that a countries’ economic vulnerability depends more on whether it relies on the service sector to generate economic growth than on whether the nation handled COVID-19 effectively.
Using data from IATA Economics, WSJ used airliner usage as a proxy for economic sectors that rely on face-to-face meetings. In the Middle East, according to the data, seats are less than 40 percent occupied now and were more than 80 percent occupied a year ago. Flights in Europe tend to average a little more than 60 percent occupied now compared to well in excess of 80 percent a year ago.
For the U.S. alone, WSJ cited Federal Reserve Bank of St. Louis data indicating that, to the extent a graphic without fine details can be cited, the country has lost about five times as many “leisure and hospitality” jobs as “manufacturing” jobs since the pandemic set in.
Another nationwide U.S. economic measure, durable goods orders, also showed signs the U.S. economy is recovering faster than some analysts had predicted. The data combined by the U.S. Census Bureau had the automobile industry leading the economic recovery charge.
There are also manufacturers that are performing well because they have seized opportunities created by the pandemic. A spokesman for clothing brand Hanes in June told PYMNTS that the company switched from making clothing to personal protective equipment quickly when asked for help by the U.S. Department of Health and Human Services.