Archive: May, 2020

The economic effects of coronavirus

Lockdown measures in England are starting to be eased after more than two months of restrictions. Many questions remain open about the economic impact of coronavirus and the extend to which is has affected different goods and services.

The Bank of England has categorised goods and services by the level of social contact. Staple goods and services like utilities and health services comprise about half of total consumption and have remained largely unaffected by coronavirus. Recreation, furnishing and clothing comprise about a quarter of total consumption and people have chosen to delay any non-essential purchases. The remaining quarter are either work related like transport or social like restaurants which are going to experience considerable structure change.

The analysis is useful when reviewing category plans and strategic sourcing initiatives. For a quarter of purchases that have been delayed we are likely to see a spike in demand once lockdown measures are removed. For the other quarter, procurement professionals should consult with established suppliers and challengers to understand the full impact of coronavirus on their market.