Worries are growing that the economic impact from the effect of Novel Coronavirus will be worse than expected and that markets are being too complacent in factoring it in as a risk. Here are some of the effect of Novel Coronavirus:
Tourism industry on their down fall
With the rise of Novel Coronavirus, consumers are more afraid of traveling because they could be exposed to the virus, they might spend less money on airplane tickets, for example, and that would be a negative consequence for the global economy. This indirectly affect the tourism industry and the money could not flow around the world making the value of the money to be vulnerable and unstable.
Stalls Factories are closing down
In addition to individual consumers taking action, some factories and stores have been temporarily shuttered in an effort to contain the virus. Making the factories to have to spend more money,losing profit or even cost their company shut down manufacturing in these period of time.
Supply chain disruptions
The outbreak of the coronavirus is meanwhile rippling through the global manufacturing supply chains, affecting especially the car industry. The world’s fifth-largest carmaker, Hyundai, for example said on Wednesday it had to close all its car factories in South Korea because it had been running out of components made in China. The carmaker is short on supplies of engine wire harness, and said is was looking for a new supplier.
Executives at a number of carmakers and auto parts suppliers warned that plants in Europe and the United States were just weeks away from being forced to close.The entire industry depends on a global network of suppliers, with parts originating in China often passing through companies in several countries before being built into cars in Europe and the US.
In Germany, carmakers such as VW and BMW have announced the temporary closure of their production plants in China, saying they expect to resume production next week in accordance with guidelines from authorities. However, those plans could be reviewd if the coronavirus continues to spread.
Industry analysts already say the impact of the virus on car sales and parts procurement could be bigger than from the outbreak of the SARS epidemic in 2003