Our economy is in the COVID valley of death. What will be on the other side, and when?

More Americans have been killed by the COVID-19 pandemic than in the Korean, Vietnam, Iraq and Afghanistan wars combined, and the carnage hasn’t ended.  Corporate bankruptcies are increasing, the second quarter Gross Domestic Product just plunged a record 32.9% from the previous quarter, and resumption of normal activities is not on the immediate horizon for most people. So the recession will be with us until we have a vaccine and the pandemic ends — likely another year. What will the economy look like on the other side of this veritable valley of death?

More industry concentration. Financially strong and well-positioned companies like , Google, Apple and Amazon will benefit during this crisis from organic growth, investment in research, and/or mergers and acquisitions. At the other end of the spectrum, companies with weak balance sheets and/or mediocre business models will fail (J. Crew, Neiman Marcus, J.C. Penney and Brooks Brothers are among those that have already filed for bankruptcy or liquidation). This isn’t just a private sector phenomenon. As many as 20% of U.S. colleges and universities may also disappear in the next few years, via closure or merger. And this pattern will repeat across all areas of the economy.

Existing trends are already accelerating and becoming part of the New Normal. Recent bankruptcies make clear that e-commerce is expanding as physical retail shrinks. Similarly, telemedicine and work-from-home technologies are all experiencing super-charged growth. So is automation (eliminating workers is the easiest way to make a meatpacking plant COVID-safe, for instance).

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Πηγή: eu.usatoday.com