North America Update: May 15
- Today is a drip-drip of bad economic news. U.S. retail sales in April plunged by a record 16.4 percent as Americans cut back their spending on many non-essential items during virus shutdowns. The report showed extreme weakness in apparel, gasoline, and auto sales. However, spending on food, beverages, and online purchases rose. The economic recovery is very much dependent on U.S. consumers. Consumer spending accounts for about 70 percent of the economy. Separately, the Federal Reserve reported on Friday that industrial production – the measure of factory, utility, energy, and mining output – fell a seasonally adjusted 11.2 percent in April, the largest monthly drop in records dating back more than a century.
- The Centers for Disease Control & Prevention on Thursday released flow charts meant to help six types of businesses – schools, workplaces, restaurants and bars, youth camps, childcare programs, and mass transit systems – decide when to reopen. The CDC’s decision trees are mostly composed of basic recommendations that serve as a checklist for businesses before they reopen. The CDC says establishments should feel comfortable opening if they do not violate local laws, promote good hygiene, increase cleaning, encourage social distancing and institute lenient sick leave policies, among other suggestions. The public release of the guidance follows a reported tumultuous back-and-forth between the CDC and the White House. Notably absent from the six decision trees was any mention of churches.
- Stay-at-home orders or business restrictions are set to expire between Friday and Monday in a dozen states, at the same time other states reach the two-week point since reopening. Hard-hit New York and Louisiana, along with Maryland, Virginia, Kentucky, and Oregon, announced first steps in a gradual return to normal. This weekend also marks a critical 2-week point since the first dozen states began reopening, including Georgia, Alabama, Idaho, and Colorado. Since the incubation period for COVID-19 is up to 14 days, new infections will just now begin to show up in the health data. John Hopkins University reported that in 24 states the number of new coronavirus cases reported each day is generally going down.
- House Democrats return to Washington today to vote on a $3 trillion, 1,800-page coronavirus package promoted by Speaker Nancy Pelosi. The bill has not been discussed by a single congressional committee and has caught criticism from both moderates and liberals in the Democratic caucus. Republicans say the bill has no chance of Congressional passage and describe it as a grab bag of long-time liberal priorities from marijuana and immigration reform to tax breaks for wealthy blue state homeowners and “environmental justice” provisions.
- Prime Minister Justin Trudeau urged citizens to “buy Canadian” to help domestic food producers. He also announced nearly $500 million in federal support for Canada’s fishing industry through wage subsidies and non-repayable grants to self-employed fish harvesters who were previously ineligible for government aid programs. This investment builds on the $62.5 million for the new Canadian Seafood Stabilization Fund announced last month to help Canada’s fish and seafood processing sector.
- Parks Canada announced a limited reopening of some operations at national parks, historic sites, marine conservation areas, and wildlife areas on June 1. The first stage of Ontario’s reopening plan will start Tuesday, which will include resuming all construction and scheduled surgeries, and allow retail locations outside of malls to reopen with physical-distancing restrictions. The Quebec government announced that primary schools in Montreal will not open on May 25 as planned, and re-opening will be delayed until next school year at the earliest.
- Ambassadors of the EU’s 27 Member States agreed on a European Commission project known as ‘SURE’ to provide states with up to €100 billion in loans to support temporary unemployment programs.
- After Swiss schools, restaurants, and shops opened on Monday the number of new cases has continued to decline. Five days after reopening, restaurants have reported a 40-50 percent decline in sales.
- A report by the British Office for Budget Responsibility has forecasted the UK will run a budget deficit of nearly £300 billion in the current financial year.
- Germany has removed its rules requiring travelers from Schengen zone countries to quarantine for 14 days.
- Duke-NUS Medical School in Singapore developed a COVID-19 test kit that takes an hour instead of the usual several days to detect infection. The new test can be used to see if potential vaccines work, to check what proportion of the population has already been infected, and for contact tracing, which is critical as Singapore eases up on circuit breaker measures. The test is currently available in Singapore hospitals.
- U.S. President Donald Trump has said that he is currently not on speaking terms with Chinese President Xi Jinping and that Washington could go as far as severing the “whole relationship” with Beijing if trade relations do not improve.
- India is aggressively pushing a state-backed contact tracing app to fight the spread of COVID-19, with some saying such methods suggest that the world’s second-most populous nation is on its way to Chinese-style methods of high tech social control. Meanwhile, a US $265 billion stimulus package – roughly 10% of India’s GDP – has been announced to revive growth in the country’s battered economy, as part of a larger push to be “self-reliant” and less dependent on China.
- Korea is at a critical moment in its struggle to prevent a second wave of coronavirus infections, as a virus breakout at clubs and bars in a popular Seoul nightlife area threatens to turn into a wider spread into communities.
- The Association of Banks of Mexico said that approximately 2 million clients have delayed their credit payments. Most of them, 1.4 million, are credit card users, and the rest are small and medium-sized business owners.
- The National Council of Businessmen in the Tourism sector predicted that the COVID-19 pandemic will cause a 46 percent drop in tourism GDP this year (six times more than the expected national economy decrease). The National Council also said that tourism has not been an ally of the government or valued as the engine of the economy.
- The President Andrés Manuel López Obrador ordered the army to control all public security tasks in the country, which has generated widespread criticism from non-profit organizations and the UN.
- As of today, Brazil recorded a total of 13,993 COVID-19 related deaths and 202,918 confirmed cases of COVID-19. The first two weeks of May accounted for 57 percent of all deaths in approximately two months. In Brazil, 31,790 health professionals contracted COVID-19. Nursing technicians and assistants are the most affected. The government has ordered more than 15,000 respirators by national companies, but less than half of this equipment can be used in ICUs.
- A study found that in April, 14.4 percent of industries stopped activities. Petrobras, an oil company, recorded a loss of BRL 48 billion in the first quarter of the year. The Companhia Siderúrgica Nacional, the largest mining company in Latin America, recorded a net loss of BRL 1.3 billion in the first quarter. Aid packages to airlines will reach BRL 4 billion and the Minister of Infrastructure warns of the serious future of the sector. Together, seven ministries will develop actions to attract private investment in tourism. The Interministerial Committee will be coordinated by the Special Secretariat of the Investment Partnership Program of the Ministry of Economy.
- President Jair Bolsonaro created an information technology working group to reduce the impacts of the pandemic. The group’s main mission is to evaluate and select proposals for solutions in partnership with non-profit entities that contain “intensive use” of data and communication. During the crisis, the Ministry of Citizenship will transfer resources related to food security to states and municipalities through parliamentary amendments. Amnesty International Brazil launched the campaign “Our lives matter,” aiming to draw attention to groups at a higher risk of contracting the virus.
INSIGHTS & INTEL: FORWARD TO WORK: NAVIGATING GOVERNMENT GUIDELINES
Last week, United Minds’ hosted the inaugural episode of its weekly webinar series, “Forward to Work: Perspectives to Guide Re-Entry,” with a focus on navigating government guidelines. Key findings from the presentation are below.
- While there is no “one size fits all” approach, employers will need to be mindful not only of diverse and shifting government policies on re-opening, but also of the political and emotional lens through which employees view re-entry.
- Follow trusted sources for guidance (such as the CDC’s latest update) then apply your own decision making criteria that aligns with your values and organizational culture.
- The full presentation – including a sample Decision Map for consideration – can be found here.
Click here to register for future webinars. If you’d like help thinking through your re-entry plans, or how best to communicate them and train leaders, please contact Kate Bullinger, President, United Minds.
In next week’s updates, we’ll feature key findings from today’s webinar on Understanding Treatments and Vaccines.
PERSPECTIVES: IT’S NOT WHEN THE ECONOMY IS REOPENED — IT’S HOW IT’S REOPENED
Micho Spring, chair of Weber Shandwick’s Global Corporate practice, offers advice for employers and companies as they begin to think about reopening their businesses in The Boston Globe. Below is an excerpt:
Beyond tragically claiming more than 300,000 worldwide, the novel coronavirus pandemic has upended our sense of self. Social distancing has undermined the cornerstone of American identity: our individuality, our freedom, and our jobs. It’s no surprise that public officials and CEOs alike are feeling immense pressure to reopen society.
But perhaps a more important question than “when” is “how” — the way that more than 100 million Americans return to work. Restoring confidence in the economy will come down largely to one key variable: how companies engage and inspire their employees.
Below are summaries of interesting business responses to COVID-19 in recent days.
- Square and Twitter CEO Jack Dorsey donated $15 million to San Francisco’s COVID-19 Response and Recovery Fund. Funds will support small business and undocumented, mixed-status, and low-income households in San Francisco with food security and housing access.
- The Robin Hood Foundation and iHeartMedia raised over $115 million from their virtual telethon Rise Up New York! to raise funds for Robin Hood’s COVID-19 relief and recovery efforts. The funds will go directly to organizations on the frontlines providing food, shelter, cash assistance, health and mental health, legal services and more.
- JetBlue launched JetBlue Healthcare Hero, which will honor 100,000 healthcare workers with roundtrip flight certificates for two to anywhere JetBlue flies.
Layoffs Continue at Publishing Houses and Media Companies
- Quartz announced plans to restructure the business and reduce its employees by 40 percent. The editorial staff of 85 positions will be cut to 50 staffers.
- BuzzFeed made a third round of COVID-related cuts this week, including furloughing 19 staffers across the global network.
- People’s digital team has announced its intention to form a union, joining its print division, which is already unionized.
Media and Editorial Adjust to the New Normal
- Return-to-office timelines and policies from media outlets continue to vary and fluctuate based on day-to-day changes.
- Fox News extended the company’s work-from-home directive until June 15. Any reopening will happen in phases.
- POLITICO announced they will be working from home until at least July. In addition, the outlet does not plan to have physical space at the political conventions which may occur this summer.
- CNN told its staffers that they will not return to the offices until September at the earliest.
- The Washington Post shared a memo that they will not return to offices until Labor Day.
Virtual Events Take Place During Quarantine
- John McCarthy of The Drum explores how Reuters quickly transitioned to virtual events. Reuters Events’ ‘virtualisation project’ was in the works before the pandemic, aiming to add value and international audiences to B2B events across verticals such as energy, pharma, insurance, sustainability, and automotive.
- South by Southwest, the film festival held in Austin, Texas, will show seven competition projects from its virtual cinema program on Oculus TV from May 22 to May 31.
- CNN announced Wednesday it will feature teenage climate activist Greta Thunberg in its next Coronavirus: Facts And Fears town hall program set for Thursday night on the cable channel.
- Code Conference (Recode): After being initially postponed, the 2020 Code Conference was cancelled with plans to reconvene during its usual timing of June 1-3, 2021 in Beverly Hills. Code 2021 will address how the pandemic has transformed the economic landscape and what we can expect from the years to come, with 2020 speakers confirmed for the 2021 dates.
- Pulse: The Atlantic Summit on Health Care: The Atlantic Summit on Health Care was postponed to November 2020, and is still planned as an in-person event in Boston.
- The Match II: The blockbuster live golf competition headlined by Tiger Woods, Phil Mickelson, Peyton Manning and Tom Brady is set for Sunday, May 24 at 2pm ET.
For more information about how we are helping clients solve in this uncertain time, please contact:
- Micho Spring, Chair, Global Corporate Practice, firstname.lastname@example.org
- Pam Jenkins, President, Global Public Affairs, email@example.com