Which Industries Will be Benefited by the Reopening?

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At first glance, it might seem obvious which industries would benefit the most from ending the lockdowns. Of course, it would be the ones most affected by the lockdowns.

It seems logical, but, the economy is a little more complicated than that. And it’s not always so straightforward to determine which businesses the lockdowns most affected.

For example, many people would think that in the middle of a pandemic, the healthcare industry would be doing gangbusters. But in an effort to make room for what was thought would be a flood of patients, most healthcare systems suspended all but the most urgent medical care.

But it turns out that the most profitable areas of healthcare were the non-emergency ones, such as elective surgeries and vaccinations.

So, one of the industries that will benefit from an end to lockdowns will be healthcare.

It’s All Up to the People

Business depends on having customers.

So, the attitudes of people will be key when it comes to restarting the economy. We can open and staff up restaurants, for example, but if most people are unwilling to dine in public, then it doesn’t make much difference.

Many authorities have emphasized the dangers of coronavirus to facilitate compliance with stay at home orders. And it’s still an open question how quickly that attitude will reverse.

The bottom line is that in most developed countries, the service sector constitutes the largest component of the economy. Most services require personal interaction.

Even where restrictions are being lifted, safety measures such as the mandatory wearing of masks, maintaining distance, a maximum number of people per premise, might ruin the shopping experience for many people.

Meeting up with friends at the local coffee shop isn’t going to be a thing when social distance and wearing a mask is required.

Efficiency is Still Important

Many retail establishments operate on slim margins. If they are required to limit the number of customers in order to maintain social distancing, they will necessarily have less revenue, and perhaps not enough to cover expenses.

The solution might be to raise prices (as some bus companies and airlines have already done.) But that, in turn, will discourage customers. Couple the drop in retail efficiency with the increase in government spending, inflation might be a major concern.

People have changed their habits during the pandemic, such as ordering online or going to the store less often. These changes might become permanent, something companies like Uber, takeaway.com, and Amazon are banking on.

But that also means the retailers who lost customers won’t rebound from the COVID crisis.

Industrials Are Where It’s At

There are, however, many businesses that can easily adapt to the safety measures.

In fact, many have already implemented them and shut down briefly or not at all. Car manufacturing, chemical processes, mining, and industrial solutions are all perfectly capable of operating.

Perhaps the most important business sector no one has been paying attention is industrial food. Farms and food processing facilities have been shut as the restrictions on the movement of people have not allowed for the manpower to harvest food and process it.

Some companies – notably Wendy’s in the US – have simply run out of meat. Lifting the lockdowns will help this industry enormously.

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