Limited window to drive public health responses to Covid-19, says McKinsey

Updated on Mar 27, 2020 02:56 PM IST

Covid-19 Update: Global consultancy group McKinsey said many sectors such as aerospace and auto sectors may not see a restart until 2021

Coronavirus impact: A report by McKinsey has underlined the importance of adequate public health reponse to Covid-19(Arvind Yadav/HT PHOTO)
Coronavirus impact: A report by McKinsey has underlined the importance of adequate public health reponse to Covid-19(Arvind Yadav/HT PHOTO)
Hindustan Times, New Delhi | ByHT Correspondent

There is a limited window for governments to drive adequate public health responses and meet demand drawdowns with proportionate economic interventions, according to global consultants McKinsey.

The consultancy group, which analysed how government and private companies are responding to the Covid-19 pandemic across the world warned of a deeper impact on lives and livelihoods if governments do not move fast enough.

It said Covid-19 had hit sectors such as commercial aerospace, air and travel, insurance carriers, oil and gas and automotive that may not see a restart until 2021. Business leaders, the consultancy group said in a report, need to create a multi-pronged strategy to overcome the setback.

“It may take years to recover from production and supply chain stoppages, due to critical vendors located in areas impacted by the virus. Long order backlogs mitigate some concerns, though rapid adoption of remote work technologies may put a dent in high-profitability business travel,” the report noted.

The group has also cautioned companies against only looking at the short term. Immediate and effective response is vital but the longer-term dimensions are even more critical. Recession may set in. The disruption of the current outbreak is shifting industry structures. Credit markets may seize up, in spite of stimulus. Supply-chain resilience will be at a premium, the consultancy group said.

According to the report, leaders should be clear about how the regulatory and competitive environment in your industry may shift.

“Pre-existing industry challenges, a quick drop in possible revenue, and high fixed costs cause near-term cash flow and long-term growth uncertainty.

“It may take years to recover from production and supply chain stoppages, due to critical vendors located in areas impacted by the virus. Long order backlogs mitigate some concerns, though rapid adoption of remote work technologies may put a dent in high-profitability business travel,” the report noted.

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