Many trends that emerged in the lockdown period will almost certainly continue post Covid-19. Technology, for example, has received a huge boost with products like Zoom now household names.
One thing we shouldn’t forget is that periods of anxiety and boredom provide a perfect platform for creativity to flourish. Hopefully, many of you have taken the extra time that lockdown gave you to flesh out the idea that you have had for many years.
The winners are…
The big trend of the global lockdown has been the move to working from home which has worked out well and is set to continue.
There will be many spinoffs from this:
- Home improvements will benefit as people spending a lot more time at home will become aware of items that can enhance their houses. Furniture companies will get more business. Redecorating businesses will also see an uptick in their sales as will TV and sound systems suppliers.
- The businesses where staff work at home will be able to scale back on the size of their offices (there will still be a demand for offices, but it will be reduced). As rent is usually one of the high cost items that most businesses have, this downsizing will contribute to cost reduction. Another cost saving will be in reduced travel costs as staff will continue to take advantage of virtual meetings and save travel time – companies will see less airfares and petrol costs along with reduced accommodation and meal costs.
- With the reality of climate change and the petrol industry slowly dying, there will be renewed focus on solar and wind energy. This swing to renewable energy will bring in a new surge in investment – something badly needed in the difficult economic times ahead.
- Smaller towns stand to gain from this as people working from home realise they can relocate to a simpler, healthier lifestyle (a recent survey in New York showed that 50% of those surveyed would like to move out of big cities). Already parts of the Karoo are marketing the attractiveness of living in quieter and cleaner areas and are upgrading technology so that people can work there.
- Distributors and online shopping should continue to be amongst the winners as consumers see how convenient and efficient ordering online is.
- Health products and pharmaceuticals should also be successful post Covid-19 as people have grasped how important staying healthy is.
And the losers…
- The property sector has already taken some body blows – the retail sector and shopping malls will need to think creatively as consumers take to online shopping and spending will remain weak for a while. Whilst an obvious solution might be to convert shopping malls into residential units, the potential trend of people moving out of the large cities could negate this.
Office blocks will also be under pressure as demand for office space will likely continue to fall. Again, creative thinking may be needed, perhaps along the lines of office “hot seating” i.e. allowing different people to book a desk for say a day or a few days a week, or conversion to residential or small industrial units.
Industrial properties may experience some success as distribution centres for online sales grow and companies bring crucial parts of their supply chain back from overseas production.
- The coal, oil and gas industry will continue to decline. Before Covid-19, many financial institutions were refusing to finance projects in these fields and they expect renewables and electric cars to become more prominent.
- Tourism and the travel industry will take time to recover as consumer spend will remain muted due to ongoing job losses. This will have knock-on effects on restaurants, hotels and bed and breakfast facilities which additionally have been struggling with lockdown restrictions.
It will take a while for the world and South Africa to recover from Covid-19 with forecasts that the first world will not get back economically to where it was in 2019, until at least 2022. In South Africa it will take even longer.