Current State of Equipment & Software Industry After COVID 19
To say that COVID-19 adversely affected the worldwide economy would be a gross understatement. The worldwide pandemic that started in the beginning of 2020 is still going strong and while the situation in many parts of the world is consistently getting better, we’re not out of the woods just yet.
Thankfully though, the US economy is recovering and as vaccination becomes more common, there seems to be hope for the future. In this article, we’ll analyze the effects of COVID 19 on equipment and software companies, the current state of the economy, and industry as a whole, and we’ll try to predict what the future holds. For 2021 and beyond.
Side Effects to Business Operations
Operating a business during a virus outbreak is a big problem for a number of reasons. For one thing, close contact between your employees has to be minimized while also ensuring that the work you’re doing continues at a respectable pace. Another obvious setback is the overall demand and supply of your product or service.
Uncertainty and fear kill demand faster than anything and unless your work fell into the essential category of things that would be used every day regardless, your business numbers undoubtedly suffered. This is especially true for the equipment and software purchasing industry.
The main customers of these services and products are usually construction companies, and medium-sized to large corporations looking to make upgrades. Almost all construction efforts ceased after the outbreak and many planned business upgrades were put on hold due to the extraordinary circumstances. In 2020, almost 67% of US construction firms reported cancellations or delays in planned projects.
The construction industry had to suffer from many layoffs as well and contributed a total of 10.1% to the overall unemployment rate in the country. Another issue for equipment purchasers and suppliers was the fact that many of their assets were shipped from China and Korea. Due to the travel and shipping restrictions, delays and canceled deliveries were a normal occurrence.
All these factors meant that the equipment purchasers in the market lost some of their biggest customers practically overnight; a hit the industry is still recovering from.
The Current State of Economic Activity
Now that 2020 is behind us and we are well into 2021, many people are looking towards the future with hope and a newly invigorated sense of cautious optimism. Several variants of a COVID 19 vaccine have passed clinical trials and are now being distributed all over the world. In the US, vaccinations are being carried out consistently with close to 63% of adults having received at least one shot. While the US hasn’t reached “herd immunity”, the situation has improved with the lowest new Covid cases in over a year.
From an economic standpoint, things are also beginning to improve. First quarter 2021 had an increase in real GDP of 6.4 percent. Many construction projects that had been sidelined are now starting up again and companies are starting to rehire and upgrade their capital to accommodate these new changes.
Obviously, as the construction industry starts picking up steam, so do their suppliers and equipment purchasers. Companies operating in this sector should expect their order volumes to increase steadily as the year progresses. Shipping should also be much easier now as many of the trade restrictions caused by the virus have been relaxed especially for heavy imports.
All this is good news for the economy and industry as a whole and although the situation of our worldwide health is far from resolved, it’s a step in the right direction and should usher in a wave of much-needed progress for many countries.
Predictions for the Future
Predicting the future is very difficult in the best of circumstances, which makes it almost impossible to do amidst a global pandemic. While the vaccinations are rapidly underway, it will be many years before every person in the world is safely vaccinated and protected. Another thing to note is the variability of success stories in our current times.
A serious problem down the line might be the different permutations of the virus originating in different parts of the world such as the one in the UK. This strain is said to be much more contagious and harmful than the current one we’re fighting which is alarming, to say the least. However, according to a World Health Organization official, the Covid-19 vaccines authorized for use in the US and Europe offer protection against the main variants known to exist.
All these factors make predicting the future difficult. The rapid nature of change might clear things up quicker than we anticipate, or it might worsen them considerably. As cautious optimists, we think humanity will keep fighting this battle and we and our economies will adapt to accommodate the changes necessary to do so. It might be wishful thinking but if things keep progressing the way they are now, then our industries might recover sooner than we think.
We hope this article helped give some clarity to the current situation of the worldwide pandemic and what it means for the equipment and software purchasing industry.
If you’re interested in getting financing for your customers through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time-tested, hassle-free, and convenient financing option.
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