North America Update: June 25
Keep an eye out for the next update on Monday, June 29.
- More than 20 million people in the U.S. may have contracted COVID-19 since the start of the outbreak, according to an internal government estimate by the Centers for Disease Control and Prevention (CDC). This is significantly higher than the official case count and reflects a large number of individuals who have the novel coronavirus but do not exhibit symptoms. Public health experts are increasingly concerned about asymptomatic COVID-19 cases, especially among young people who may not know they have the disease and could spread it to more at-risk individuals.
- Cases in the United States had been on a downward trajectory after the previous high of 36,739 cases on April 24, but they have roared back up in recent weeks. The U.S. reported more new coronavirus cases on Wednesday than any other single day as the virus spreads to new communities and sparks outbreaks, mostly across the South and West regions. Almost half of all new cases came from Florida, Oklahoma, South Carolina and Texas, which reported their highest single-day totals on Wednesday, but case numbers have been rising in 29 states.
- As a result, some states are introducing new restrictions and businesses are facing delays in reopening as coronavirus cases surge. In the northeast, New York, which at one point had the most daily virus cases, along with Connecticut and New Jersey — said they would institute a mandatory quarantine for some out-of-state travelers. Neither Texas nor Florida has implemented statewide mask mandates, but both recently allowed local and city officials to issue such orders for local residents. Texas Gov. Greg Abbott announced today that the state will pause any further reopening.
- Applications for unemployment benefits have slowly eased from a late March peak of nearly seven million but still remain well above pre-pandemic levels, according to data released today by the U.S. Department of Labor. While the employment data has offered signs the labor market is slowly healing, economists say an increase in coronavirus cases could affect efforts to reopen the economy and result in higher unemployment numbers in the weeks ahead. States where the coronavirus is spreading the most – such as Arizona and Texas – are experiencing a slowdown in economic activity and are already seeing contractions in economic activity. The Labor Department will publish data on June hiring next week. Overall employment is down by about 20 million compared with February.
- Several pharmaceutical companies and start-ups have started virtual clinical trials, also known as remote or decentralized trials, to accelerate their research efforts on COVID-19 drugs. The U.S. Food and Drug Administration helped clear the path for virtual trials in March by issuing guidelines for these types of studies. Traditional clinical trials require participants to make frequent in-person visits to a clinic or hospital. By allowing for virtual trials, researchers can recruit patients, gain consent, administer treatments, monitor safety and collect data without subjects leaving their home. This new approach may accelerate the time and expense of clinical trials.
- Prime Minister Justin Trudeau offered new details on the Canada Student Service Grant program, which will create thousands of temporary jobs for young people this summer. The grant to post-secondary students and recent graduates would provide one-time payments of up to $5,000 for volunteering in pandemic-related programs, with students receiving $1,000 for every 100 hours worked.
- A new study released today revealed that COVID-19 deaths that occurred in long-term care facilities averaged twice the rate of other developed countries. Long-term care residents made up 81 percent of all COVID-19 deaths in Canada; compared to an average of 42 percent in 16 other countries.
- Yesterday, British Columbia announced that it is entering the phase three of its four-phase COVID-19 restart plan, which means “smart and respectful” non-essential travel is now allowed throughout the province. Hollywood North will also be looking to restart with Phase 3, as motion picture and television production are allowed to resume.
- According to the World Health Organization’s regional director for Europe, Hans Kluge, there has been a significant increase in the number of COVID-19 cases across the continent for the first time in months following the easing of restrictions.
- The German Council of Economic Experts expects an economic slump of 6.5 percent this year, with a prediction of 4.9 percent growth in 2021. Economic output is not expected to return to pre-pandemic levels until 2022 at the earliest.
- French President Emmanuel Macron introduced a reform of long-term partial activity with the aim to help companies preserve jobs for the next two years during an expected economic decline. On Wednesday, French Health minister Olivier Véran offered trade unions an envelope of €6 billion to be shared between public hospitals, care homes and the private sector, in order to raise the wages of non-medical hospital staff.
- In Switzerland, the tracing app SwissCovid launched this morning, and it has been downloaded more than 300,000 times. Ireland plans to launch its COVID tracing app later this week as masks are set to become mandatory on public transport for almost all passengers and the Government moves to increase capacity on the services. There will also likely be an easing on the mandatory two week quarantine for passengers arriving to Ireland from certain designated countries.
- In Belgium, swimming pools, wellness centers, amusement parks, casinos and gaming halls will reopen in phase four of relaxing lockdown measures from July 1. People will also be allowed to meet with up to 15 different people per week instead of the current 10.
- According to the European Asylum Support Office, the pandemic caused an 87 percent drop in asylum applications in Europe.
- The European Medicines Agency has recommended granting a conditional marketing authorization for Gilead’s remdesivir, making it the first medicine against COVID-19 to be recommended for authorization in the EU.
Weber Shandwick’s Asia Pacific team spotlights how the pandemic is transforming supply chains. As many markets within the APAC region begin to move into the recovery stage and economies reopen, businesses are predicting that regional supply chains will recover within 6-12 months.
- In South Korea, early export figures show reduced shipment declines in June, driven by sustained demand for semiconductor components. Average daily shipments increased by four percent in the first twenty days of June, an improvement over May’s decline of 20 percent
- Industry specialists observed that the use of machine learning and data analytics has already increased forecast accuracy by as much as 20 percent. Digitisation of processes also represents an opportunity to reduce transaction costs and increases transparency.
- When pandemic lockdowns and travel bans disrupted supply chains across Asia, many businesses and governments began to rethink their supply chains, many of which relied heavily upon China’s workforce. And, as recovery unfolds, businesses are now looking to cultivate supply chains in a wider array of markets. Southeast Asia is poised to benefit from the shift to more distributed supply chains. Many businesses are implementing a ‘China Plus One’ strategy, managing risk by locating plants and facilities in China and another Asian nation.
- Following a successful containment of COVID-19, Vietnam has demonstrated its ability to ramp up production and can boast lower labor costs than China, exporting more than 415 million face masks in four months. It was recently invited to join Australia, India, Japan, and the U.S. in a teleconference to discuss the post-pandemic economic recovery.
- Taiwan, Japan and South Korea have allocated budgets to support reshoring of their businesses, actively bringing production lines home. These countries have previously heavily invested in manufacturing technologies across robotics, AI, automation, and 3D printing, laying the groundwork for moving manufacturing to other markets.
- United States Ambassador Christopher Landau noted that the Mexican Government has been giving worrying and discouraging signals for foreign investment, especially in the energy sector. In a statement Landau said, “I also cannot lie to my compatriots and say that it is a favorable time to invest. We have seen discouraging and worrying things.”
- The Association of American Fuel and Petrochemical Manufacturers asked President Trump for support against what it considers to be the effects of its investments in Mexico. In a claim made five days after the renewed Free Trade Agreement began, it denounced various actions by the Mexican Government as threatening the direct investment that U.S. companies have made in the sector.
- The World Health Organization (WHO) expressed concern about the high percentage, currently at 31 percent, of positive results in COVID-19 tests in Brazil. A vaccine created by the University of Oxford against COVID-19 began testing in Brazil. The vaccine tests will have 2,000 volunteers in São Paulo and an additional 1,000 in Rio de Janeiro.
- During the first five months of the pandemic, Brazil managed to reach a record value of US $42 billion in exports related to agribusiness. Nissan laid off nearly 400 workers at its Rio de Janeiro plant before reopening and resuming operations this week. The International Monetary Fund reduced the projection for Brazil’s GDP in 2020 to fall 9.1 percent.
- Diesel consumption recovered to a pre-crisis level, said president of BR Distribuidora Rafael Grisolia. According to Grisolia, the level of diesel consumption is a good macroeconomic indicator, which points to the growth of the economy, since Brazilian production depends on the diesel used in the trucks that transport goods around the country, and the demand for fuel is already at pre COVID-19 levels.
INSIGHTS & INTEL: THE GLOBAL ECONOMY
- The deepest and broadest global recession in more than 80 years is here. The International Monetary Fund (IMF) this week forecasted that the global economic growth is projected at -4.9 percent in 2020, nearly 1.9 percentage points below their April 2020 World Economic Outlook forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than earlier anticipated, and the global recovery is projected to be more gradual than previously forecast. The IMF said that 2021 global growth is now projected at 5.4 percent. The IMF forecast for the U.S. economy was -8.0 percent growth for the entire year of 2020, with a recovery of 4.8 percent growth in 2021. The IMF’s outlook for the U.S. is slightly better than for Europe (projected at -10.2 percent growth this year), but less than for Japan (-5.8 percent growth). China is the only major economy that still has a chance of slightly positive growth this year of about one percent.
- The Organization for Economic Cooperation and Development (OECD) is forecasting an even deeper global recession, predicting a six percent decline in global growth in 2020. It forecasts frozen business activity in many sectors, widening inequality, disrupted education and undermined confidence in the future as contributors to the global recession. As restrictions begin to ease, the OECD said the path to economic recovery remains highly uncertain and vulnerable to a second wave of infections.
- The World Trade Organization predicts a decline in global trade this year of between 13-32 percent (equating to a 2.5 to 8.8 percent drop in global GDP), which will most acutely affect countries dependent on exports.
- The Bottom Line: Even if the pandemic is brought under control in the coming months, the global recovery will still be slow and uneven because countries are emerging from economic and social lockdowns at varying speeds. Caution by both consumers and businesses will mean uncertainty for labor markets, global trade and new investment, given the unprecedented speed and scope of economic decline. The depth and duration of the global recession depend not only on the course of the virus and lockdowns, but on government stimulus measures remaining in place to support collapsing incomes and revenues. Such measures continue to lag in emerging markets, which have a high dependence on foreign financing.
FORWARD TO WORK WEBINAR SERIES
United Minds’ webinar series, “Forward to Work: Perspectives to Guide Re-Entry,” offers companies a topical new perspective on workforce re-entry, including public affairs, public health, organizational preparedness, employee resilience, workforce inclusion and corporate reputation. Our next session takes place tomorrow, Friday, June 26 at 12 PM EST and will feature TIAA‘s Chief Employee Relations and Associate Experience Officer Andy Habenicht and Chief Talent Management Officer Josh Greenwald to discuss how employee expectations are evolving and how employers will answer the call.
Americans Adapt to New Mask Regulations
- With States around the country passing new legislation requiring citizens to wear masks, media is focused on providing practical solutions to help address issues with masks.
- Harvard Business Review calls for publicly available masks with high-filtration levels, similar to those of surgical or N95 masks required for healthcare workers.
- The New York Times published a story on how masks are eliminating nonverbal social cues like smiling, making social interactions more awkward for anxious Americans.
- TODAY published a product round up of breathable masks for people to exercise in.
- The Verge shared an article highlighting several strategies to keep your glasses, and your vision, clear when you’re wearing a mask.
Media Continues to Address Equity and Inclusion
- Vulture published a roundup of some of the biggest shakeups in the media industry following the murder of George Floyd and subsequent BLM protests. Some of the leaders at these companies have resigned or stepped back, including top editors at Bon Appétit, The New York Times, Condé Nast Entertainment, Refinery29, Okayplayer, Variety, and The Philadelphia Inquirer, while other companies are being called on to better their policies.
- People launched a new digital series this week called “People’s Voices from the Fight Against Racism.” The series puts Black perspectives front and center as it explores the topics of equality and justice.
- The Los Angeles Times Guild’s Black Caucus sent a letter to the newspaper’s leadership Tuesday, outlining the lack of Black journalists in the newsroom, the experiences of those journalists who are Black and demands for how the organization can rectify the issues.
- Forbes has named Sade Muhammad director of representation and inclusion partnerships, a new role to work with marketers and brands on campaigns and strategies that advocate and drive systemic change around diversity, equity and inclusion.
- New Virtual Programming: The Atlantic, Bloomberg, Techonomy and Wall Street Journal, among others, are continuing to expand their roster of virtual events. Thematically, these virtual gatherings explore everything from the customer experience and data-driven commerce amid COVID-19, to lack of access to clean water, the future of work, and planning for healthy workspaces through AI.
- US Open Tennis: The United States Tennis Association changed course and reinstated the wheelchair tournament at the 2020 U.S. Open this week after outcry from players.
- Kentucky Derby: Churchill Downs received approval from state officials to host the 146th annual Kentucky Derby on September 5 with limited spectators.
- MLB: MLB and the MLBPA agreed on terms and conditions for a 2020 60-game season. Players will report to training camp starting July 1, with opening weekend taking place on July 23 or 24.
- Ryder Cup: Following the announcement of the PGA Championship going spectator-less, reports have emerged of the Ryder Cup moving to 2021. PGA of America has yet to make an official announcement.
For more information about how we are helping clients solve in this uncertain time, please contact:
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