The COVID-19 pandemic forced recession in global economies, as most of the economies including the US will post negative growth in 2020. Right from the construction and building industry dependent on the which are the cement industry, steel industry, construction equipment industry, elevator industry, and the paint industry to the crude oil and even the food and beverages- every vertical is bound to suffer the ill effects of corona’s outbreak. The slowdown in the construction industry will directly affect these industries too. Before the pandemic scenario, the US and China trade war and the rising trade uncertainty has already exerted adverse effects on the global economy. Adding to this, the tension between the US and Iran along with the tightening sanctions on Venezuela by the US is again impeding the country’s growth.
Impact on food & beverages industry:
Talking about food & beverages industry, it attracts majority of its revenue from North America, particularly the US. The COVID-19 pandemic impacted the US food industry due to the government closures, resulting in layoffs of workers and financial losses for restaurants and their respective owners. However, during April 2020, the US Secretary of Agriculture Sonny Perdue has announced the approval of a request from Vermont to provide online purchasing of food to Supplemental Nutrition Assistance Program (SNAP) households. Thus, only the online modes of food chains are to be benefited when the offline ones have already come to a halt.
Impact on crude oil:
The US has been one of the major import destinations for catering to the Chinese crude oil need, however, the trade war between China and the US has forced China to shift its import destination from the US to Gulf countries such as Iran. This has negatively impacted the exporting oil capacity of the US. Further, amid this outbreak of COVID-19 which has caused a severe negative impact on the oil industry, many of the industry experts are expecting the average price of Brent crude around $30 per barrel in 2020 as an increasingly likely scenario.
Impact on renewables:
Moving to the renewable energy industry, it was growing with a significant growth rate all across the globe pre COVID-19. In the mid-January 2020, the International Energy Agency (IEA) estimated that the US alone will add 13.5 GW to the solar power capacity in 2020. This was nearly 70% higher than the previous single-year high in 2016 of 8 GW. Renewable energy projects in California, Texas, Florida, and South Carolina covered almost of half of the projects that were to be initiated in 2020. Significant growth in the residential and commercial renewable projects was also expected due to more efficient solar PV and rooftop systems getting introduced to the market. However, the projections are not expected to get fulfilled in the year due to the corona’s outbreak.
Impact on construction activities:
As per the Bureau of Economic Analysis, the construction industry contributed $886.6 billion to the US economy in 2019 as compared to $839.1 billion in 2018, which was around 4.1% of the GDP in both the years. However, the projections seem to get disturbed due to the COVID-19 pandemic. This is due to rapidly changing circumstances which have compelled the government to impose a ban on all the activities that involve social gathering. During the initial lockdown, no ban on construction sector was introduced in the US, however, by the end of March 2020, in a revised order ban on non-essential construction projects were introduced in most of the cities of the country. The ban in construction activities has halted the growth of the construction sector in the country
