What will the re-start look like in the short, medium and long-term?
Edison Group – Economic life after lockdown
The acute phase of the coronavirus crisis may be close to over. National governments may be keen to downplay it to maintain public compliance but during May almost all of the statutory lockdowns currently in place globally are expected to be relaxed.
Diabolical flash PMI data for April may therefore represent the trough in economic sentiment for the very short-term. Yet at least until the end of the 2020, national economies will have to contend with the prospect of social distancing measures and the risk of a second wave of infections, a dampener for spending and investment.
For the longer-term, we expect an acceleration of the trend to conduct business digitally as it is now proven to be effective while cheaper, enables social distancing and has a smaller environmental footprint. We remain neutral on global equity markets as valuations have recovered from the distressed levels seen during March.
Exhibit 1: Lockdown periods nearly complete across developed markets
Source: National governments, Edison calculations
In only a few weeks, the strict lockdowns which have been imposed on a significant proportion of the global population will be eased at least in part, allowing schools and businesses to reopen. Strict non-pharmaceutical interventions have been effective in bringing R0 below 1 and infection rates are for most nations on declining trends.
Yet the economic cost has been enormous. Over 25m jobs have been lost in the US alone and unemployment is forecast to double in the UK to 10% by the end of the year.
Edison Group – also photo