The Covid-19 pandemic has changed a great many things. In the short term, it closed down large parts of the economy that rely on social contact, drained the life from city streets and left the trains empty. It put millions temporarily out of a job, their working lives held in suspense. As we open up again some things have returned to normal, but others are in a state of flux.
Working patterns are likely to change permanently. Companies have discovered productivity does not collapse if many people work from home rather than the office. Many individuals are saying they do not want to go back to the daily battle with the commuter train and bus system, valuing the saved time and reduced hassle that more working from home brings.
Some companies are cutting their office space, switching to “hot desks” and accepting that the office is for two days a week, not five. Others are keeping their current office space but switching more of it to meeting rooms, recognising that people willingly come in to collaborate but not to sit at a computer terminal to do things on their own that they can do at home.
This will, in turn, require changes to the commuter transport timetables, tickets and systems. It will generate change in the services for commuters that businesses provide in town centres. Leisure and recreation, entertainment and sport are likely to be the bigger drivers of revived interest in cities.
The retail revolution sweeps on
Covid accelerated the trend for people to buy more online from their armchair. Some high streets and shopping centres will shrink or close as the industry contracts to the right amount of good space. There are plenty of property opportunities to repurpose or replace redundant shops.
Covid-19 lockdowns have caused interruptions and pauses to supply chains. The partial closure of Chinese factories and container ports have limited and delayed supply from the world’s largest exporter of goods. The surge in demand for laptops, smartphones and computer pads to cope with a rush to homeworking, home learning and home entertainment caused a shortage of computer chips. The car industry cut back on orders during lockdown, only to find the chips were selling elsewhere when they needed to tool up again.
More recently, the world has suffered from a shortage of gas and other energy. Low winds and too little rain in various places hit wind and hydro electricity. Russian gas was in tight supply and a hurricane hit some US output. Prices shot up and countries scoured the world bidding up supplies.
These dislocations are causing price rises and more uncertainties. It is leading more countries to want to return to greater self-reliance, with programmes to boost home output and substitute for imports. It is making markets more volatile, offering opportunities for some to make record profits out of scarcity whilst others struggle on reduced volumes, short of basic supplies. Some problems can be solved quickly but others needing major investment as in semiconductors and energy will take longer to resolve.
Lockdown policies were particularly disruptive for labour markets. A problem which had been long building in a number of countries was the shortage of long-distance heavy goods vehicle (HGV)drivers. The profession was ageing, with a reluctance on the part of younger men and women to undertake such work. A lack of family friendly hours, days and nights away from home, poor facilities for overnight stops and rest breaks all conspired to put people off getting the training. Lockdown created demands for many more drivers to fulfil a big increase in online orders, whilst training and testing fell away. Van driving permits more flexible hours that can dovetail with family commitments. Today countries are struggling to recruit and train a new generation of HGV drivers, and are having to reconsider the facilities, hours and rewards for these jobs.
Generally, lockdown seems to have led to more retirements, whilst re-opening has seen a profusion of new jobs particularly in lower-paid areas where employment fell away over the period of closures. There is likely to be some increases in pay to seek to draw people back into employment or tempt them away from other roles into areas like chefs for catering, care workers, food and farming employees and truck drivers.
If all goes well, higher pay will be partly matched by higher productivity and will allow some rebalancing of employment patterns to suit the new shape of economies. Some in markets fear that there could be a series of inflationary pay awards that lead onto price rises which, in turn, will require tougher action by central banks to curb inflation.
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