Business leaders expect trade to recover from the effects of "Corona" faster than 2008
Senior executives and decision-makers in a number of companies and institutions expressed widespread optimism about the recovery of trade in the wake of the Coronavirus to pre-pandemic levels more quickly than it recovered after the financial crisis in 2008.
The study, which was commissioned by DP World to the information unit of the Economist magazine, showed that 70% of companies expect trade to rebound to pre-pandemic levels more quickly than it recovered after the 2008 financial crisis that took two years and two months. Nearly a third says the recovery will be twice as fast as trade returns to pre-pandemic levels within one year.
The study data confirmed that the pandemic has made a permanent change in the way companies do business, with 83% of executives indicating that they are in the process of reshaping their supply chains by replacing suppliers or adding new suppliers through the use of multiple logistics service providers and / or Change and purchase of production sites.
During the early stages of the pandemic, lockdowns and disruptions to production revealed vulnerabilities, including over-reliance on specific geographical areas and a lack of transparency over the movement of goods.
Many of the world's large economies were in lockdown of varying severity, and international travel came to an almost complete halt as the commodity supply chains were described as being complicated by supply and demand shocks that they were not prepared for.
Despite the widespread economic impacts of the pandemic, 42% of the survey respondents said that the global revenues of their companies expanded in the first half of 2020, while 19% said there was no change from the previous year.
These numbers are encouraging at a time when only one of the world's major economies, the Chinese economy, is registering growth in its activity.
The study also found that only 8% of companies believe that recovery to pre-pandemic levels will take more than five years, and less than 2% of them believe that trade will never recover.
On average, companies said they were reallocating a third of their revenue from the first half of 2020 in order to reshape their supply chains.
A fifth of the respondents stated that their companies will spend more than 50% of the first half revenues, and 65% of the respondents said that the reconfiguration process will be completed within one year and it is not an easy task given the complexities involved in changing supply chains, which are The result of years of investment, relationship building, education and training, among a host of other factors.
The CEO and Chairman of Dubai Ports World Group, Sultan Ahmed bin Sulayem, said that the impact of the "Covid-19" pandemic has redefined how to maintain communication between parts of the world and the way companies manage their business, considering that periods of crisis have historically been a strong motivating factor on Innovation.
He added that the effects of the pandemic have accelerated the transformation of supply chains and pushed towards rapid adaptation in order to ensure flexibility in global trade movement. The global business community has also risen to the level of the challenge and has taken strong and decisive measures to make supply chains more robust and resilient, and we will reap the benefits of that in the coming years. .
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