CEOs across the globe are coming to terms with the reality that business will be anything but normal over the coming months as the impact of the coronavirus pandemic continues to escalate.
But while revenues are set to suffer a short-term hit, the majority of leaders remain confident that their companies will be back on solid footing within the year, according to a new study on the business impact of the outbreak of COVID-19, the disease’s formal name.
The Young Presidents’ Organization’s (YPO) survey, released Tuesday, found that 82% of business leaders expect declines in revenues over the next six months, but more than half (54%) anticipate revenues will be back to normal in a year’s time. And 61% of CEOs expect their total fixed investments to remain unchanged year on year.
Of note, the study, which surveyed more than 2,750 CEOs across 110 countries, was conducted from March 10-13, 2020, just ahead of sweeping new measures aimed at curtailing the outbreak. Since then, several U.S. states and governments across the globe have imposed strict closures of bars, restaurants and other non-essential businesses.
At the time of asking, respondents in Asia, and particularly China, where the virus is thought to have originated, were facing the greatest impact, with 84% reporting feeling a hit. The region was followed by South Asia — namely India, Nepal and Sri Lanka — (78%), the Middle East and North Africa (74%) and Europe (70%).
Businesses in Australia and New Zealand (52%), the U.S. (50%) and Canada (45%) were then feeling comparatively less impacted. Roughly half of all respondents were from the U.S.
That landscape, however, will likely have changed since then, as the severity of the outbreak intensifies. YPO member and executive chairman of Singapore-based healthcare business Novena Global Lifecare, Nelson Loh told CNBC’s “Street Signs” on Tuesday that business sentiment is cautious and global job cuts would be inevitable.
Governments and central banks across the globe are stepping up with new measures aimed at curbing the economic impact on the virus. On Tuesday, the U.S. and the U.K. outlined new fiscal packages to support their citizens and businesses.
How CEOs are responding
Among the industries seeing the greatest impact from the fallout are hospitality and travel (89%), education (87%) and media and entertainment (80%). Meanwhile, production firms in agriculture, factories, mines and utilities reported some uptick in revenues.
Nevertheless, business leaders across the board (95%) said they’re taking new measures curb the impact of the virus. That includes communicating more regularly with employees (68%), adopting new health and safety procedures (67%), cancelling major events (64%) and halting business travel (53%).
Loh said that could provide an opportunity for leaders to innovate and find new ways of doing business.
“The virus has truly disrupted the way business will be conducted … technology adoption and remote communications will be the way forward,” he told CNBC Make It, noting that his business is currently looking at how it can conduct more online medical consultations and increase delivery of medical products.
Advice for other businesses
Fred Mouawad, YPO member and CEO of Synergia One Group of Companies told CNBC Make It that he was “encouraged” by the findings and recommended businesses, where possible, to try to embrace remote working to keep operations running as smoothly as possible.
Meanwhile, other respondents, when asked for their advice for business leaders, recommended the following:
- Focus on the facts
- Communicate regularly with employees and stakeholders
- Stabilize supply chains
- Make short-term and long-term plans
“We will soon realize that we can achieve a lot more than we thought was possible by working at a distance,” said Mouawad.
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