There are 45,204 confirmed cases and 1,118 deaths from the Wuhan Novel Coronavirus outbreak as of 12 February 2020. The World Health Organization, on Tuesday 11 February 2020, gave an official name for the illness caused by the new coronavirus, namely COVID-19. The acronym stands for coronavirus disease 2019.
Looking for a positive trend
The growth factor of the virus is the factor by which a quantity multiplies itself over time, and is calculated by dividing every day’s cases by cases on the previous day. If the number of people infected grows by 5% every day, then we have a growth factor of 1.05, for example. A growth factor above 1 indicates an increase, while a growth factor below 1 indicates a decline.
On 23 February 2020 Hubei decided to use a broader definition to diagnose sick people. The new definition includes people as infected when they have virus symptoms, plus a CT scan showing chest infection. This has resulted in a sudden huge increase in the number of cases, with 14,840 people diagnosed with Covid-19 in one day.
Before this change we were able to see a trend and estimate the potential trajectory of the outbreak. With this broader new definition, that’s now gone, throwing the trend mapping into chaos.
Coronavirus impact on the economy
While we have learned a lot from SARS, which was recognized at the end of February 2003, the impact of this crisis is different. Since SARS, China has become the second-largest economy in the world, while the tourism sector in China has expanded enormously.
With airlines canceling flights, and businesses closing stores and plants in affected areas, GDP is expected to take a big hit. The current situation will weigh heavily on demand for commodities and petrochemicals, while the global supply chain feels the pinch.
OPEC has also dramatically lowered its forecast for oil demand growth this year, citing China’s coronavirus outbreak as the major factor behind its decision. In the latest monthly report published on 12 February 2020, OPEC revised its outlook downward for global oil demand growth to 990,000 barrels per day in 2020, down by 230,000 bpd from the previous month. The amended forecast is likely to result in additional output cuts sooner rather than later.
The WHO is working closely with global experts, governments and partners to rapidly expand scientific knowledge on this new virus, to track the spread and virulence of the virus, and to provide advice to countries and individuals on measures to protect health and prevent the spread of this outbreak.
As we don’t know the outcome and duration of this crisis, companies should also prepare themselves and review their preparedness.
First of all, there are the people that sit at the very core of a business, so planning for employees to be off work through illness or other reasons is an essential consideration when developing a response plan.
Ben Hockman, head of crisis consultancy at Ricardo, wrote an interesting article titled “Coronavirus outbreak – how prepared is your business to cope with it?”
A few key points are highlighted below:
- update your business impact analysis with a clear understanding of your key products and services, and the activities that underpin them,
- ensure business continuity plans are in place and up to date,
- undertake or update your supply chain assessment so that the business has a clear understanding of the supply chain and, where required, put contingency measures in place for key suppliers,
- put crisis and pandemic response plans into action.
You can read Ben’s article here.
Containment of the virus, and getting through this crisis together, is today’s priority. Once this crisis is over, and as we always learn from bad experiences, we may see a drive towards better crisis preparedness and quality management. It’s never too late to review your preparedness while you can!
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