Choose any industry you know about and write what effect does covid-19 have on it

Impacts of Covid-19 Pandemic on the Clothing Industry
Student Name
Institution Affiliation
Executive Summary
The corona virus pandemic has brought the entire world into a standstill. Countries and governments around the globe have instituted measures to curb the spread of the virus and consequently stop the number of people dying from the disease. These measures have in the process affected many sectors and industries and countless individuals who depended on them. The report will extensively examine the impact of the pandemic on the clothing and apparel industry. It will focus on the multinational corporations such as Adidas and Nike and identify the impacts of the pandemic on persons within and outside the US who depend on them for their livelihoods. The report will also identify the changes in the global business environment over the past six months due to the corona virus pandemic. Last but not least the report will also cover the implications for the clothing and apparel industry and the firms involved in an uncertain future and provide some recommendations.
Introduction
Globalization has immensely contributed not only to increased interaction between people but also companies and governments around the world. The world trade has been dominated the global supply chain with countries reducing their tariffs and rates to join the world trade organization (Quiles, 2020). However, these significant impacts of globalization are under severe threat from the corona virus pandemic that has brought the entire world into a standstill. The virus that broke out in Wuhan, China in December 2019 has since spread across the globe. It is reported that there are more than 16 million confirmed corona virus cases globally and over 600000 people have since lost their lives to the disease (Segrave, 2020). The World Health Organization (WHO) labelled it a global pandemic in March and since then countries have instituted various measures to mitigate its spread. These measures have mainly focused on encouraging individuals to observe social distance and avoid unnecessary movements and travels. As such, movements to and from countries and regions particularly those that have been gravely impacted by the virus have been halted. While the initiative has assisted to slow down the spread of corona virus, it has negatively impacted trade activities. Several industries continue to grapple from the devastating impacts of covid-19 including the apparel and clothing sector. Global clothing apparel companies such as Nike and Adidas that depend on raw materials and cheap labor from the developing and underdeveloped nations have been severely hit and are counting massive lossess. This report will extensively examine how the global business environment has been impacted by the pandemic in the past six months, impacts of the covid-19 crisis in the apparel industry and some of the multinational firms and the overall implications in an uncertain future.
Changes in the Global Business Environment over the Past Six Months from the Corona Virus Pandemic
The corona virus pandemic continues to adversely affect the global business environment and globalization in general. Some of the world’s largest economies including the US, China, Germany and Italy have been forced to close their borders and also minimize movements within their regions. As such, business and trade interaction within and outside many countries has been severely impacted. Supply chains in the manufacturing sector have been hindered from direct and indirect disruptions (Quiles, 2020). This is because factories in the reputable production hubs of the globe such as Asia have been forced to close down due to escalating cases of corona virus. Over the recent past, China has established itself as the central manufacturing hub and supports many global operations and businesses (Jones et al., 2020). China is the leading supplier of intermediate inputs used in manufacturing by many overseas companies and as shown in figure 1. However, the pandemic has caused significant disruptions in its outputs and consequently repercussions in the global value chain (Areddy, 2020). The European Union has adversely been impacted because of its dependence of automotive, machinery and chemicals from China.
The service sector has also suffered immensely in the last six months. Stringent measures that are restricting movements have impacted the productivity and profitability of sectors such as tourism, travel and hospitality. The service sector has also been impacted from an employment angle in the form of massive layoffs as companies try to balance their books in the midst of increasing debt and lost revenue. The International Labor Organization (ILO) has estimated that at least 10 million people globally are losing their jobs monthly as a result of the corona virus (Segrave, 2020). According to figure 1 below, the unemployment rate in some of the leading global economies has been on the rise over the past six months. For instance, the unemployment rate in the US is at 10.4% up from 3.7% during the tail end of 2019 (Jones et al., 2020). Unemployment usually has ripple effects including escalating poverty levels that are sure to characterize the globe in the near future.
The past six months have also not only witnessed distortion in trade flows but also development of beggar-thy-neighbor trade regulations. Some countries have temporarily embraced mercantilist forms of protectionism in light of shortages in essential resources required to fight the disease (Singh, 2020). The WTO has reported receiving requests from member countries in their efforts of securing domestic stock of not only pharmaceutical products but also protective equipment.
Furthermore, there have been drastic shifts in stock markets around the globe with increasing cases of covid-19. The DOW and the FTSE for instance, suffered their biggest drops since 1987 particularly during the first three months of the pandemic and as shown in figure 2 (Jones et al., 2020). Central banks in some of the countries including the UK have since reduced interest rates in that regard thereby making it cheaper to borrow and boosting their economies. The global oil prices have also been adversely affected from the pandemic over the past 6 months. Brent crude which is the benchmark used in Europe and globally noted that oil price had dipped to its lowest in 18 years. According to figure 3 below, global lockdown measures saw oil price at $20 in May (Jones et al., 2020). The price has since picked up because some regions have relaxed their restrictions and the demand has gone up.
Impacts of Corona Virus Pandemic in Apparel and Clothing Industry
The first impact of the pandemic in the clothing industry relates to loss of revenue, productivity and profitability. The discretionary nature of the fashion industry exposes it to pronounced effects from the calamity (Fashion Revolution, 2020). Fashion retailers have been progressively shutting down operations as confirmed cases and deaths from the disease continue to increase daily (Bhattacharjya, 2020). Consumers have more on their plates and hardly have enough funds to cater for their essential needs and services. Bhattacharjya (2020) reiterates this position and shares “consumers around the world have been compelled to restrict themselves in homes and amidst pressing concerns of economic uncertainty and rising financial burdens, it can safely be assumed that grocery, medicines, and staples purchase will take precedence over fashion”. Based on the above statement, economic experts predict that revenues in the fashion industry will contract by about 30% in 2020 (Magzter.com, 2020). This is quite high and is sure to get some of the small scale companies out of the industry.
Secondly, the...