Changes after lockdown

As governments are starting to lift lockdown, or are at least asking about it here in the UK, lots of people are wondering what this new reality will look like.

I don’t think anyone is expecting everyone to go back to the normal commute and book a mini-break in Venice as soon as lockdown is lifted. Yes, there may be some businesses that don’t open again. Almost all companies will have taken this opportunity to re-evaluate staffing levels and possibly made some employees redundant to “streamline” going forward. Some may have made a business decision to close the office and work from home permanently, or move to online sales, to reduce overheads and give them a competitive advantage. I think most of us would expect to see a quieter city centre and more closed shops when we emerge from our isolation.

Looking beyond the local impact what could happen on a global scale? If you have been reading past the coronavirus headlines, you will see that oil prices dropped into negative figures for the first time ever. I was left scratching my head – people were willing to pay $37 to take a barrel of oil off their hands?

It is down to storage capacity – it is full. So even at rock bottom prices no one can squeeze any more in their storage until consumption starts to pick up. There were apparently more fully laden oil tankers at sea than there has ever been before and with few customers they had nowhere to dock. Most countries have agreed to production cuts, but at those prices facilities will be closing due to bankruptcies if they haven’t been mothballed. Production won’t ramp back up until the price increases to a level that is profitable.

If that doesn’t ring the financial meltdown alarm bells, then Germany announcing a recession that will take 8 years to come out of should. Firstly because all countries are cautious about announcing the full extent of their financial problems and secondly Germany was not one of the most Covid-19 infected countries in Europe, with only 87 deaths per million people compared to over 400 for Italy and UK ( taken from https://www.worldometers.info/coronavirus/ on 7/5/20).

Then you have to look at what the US are doing – I know it’s a mixture of horrifying and farcical watching the words fall out of President Trump’s mouth, but as the dominant global player it’s important.

War Games. The last few weeks there has been more antagonism with Iran in the Gulf, they have encroached into China’s territory in the South China Sea, and they are carrying out naval drills with the UK on Russia’s doorstep. Plus they have continued meddling in Venezuela which has the biggest oil reserves in the World. These provocations aren't really new, but interesting to see there has been no pause during the pandemic.

Historically wars have been seen to follow recession. Given that just the announcement of “tensions” from the US normally results in a boost to oil prices, a new war would have the added bonus of boosting GDP and providing plentiful contracts for re-building to US contractors, after the unfortunate country has been plundered.

There’s never much public support for war without a trigger. There needs to be a catalyst for governments to “react” to. Remember how slowly and ineffectually the UK government responded to the threat of Covid-19? Or how it took 3 days to comment after the Grenfell Tower disaster? This is normal, government is a ponderous beast to manoeuvre. When the response is fast and they immediately know conclusively who is to blame before the dust has settled and an investigation has even begun, then strap yourself in to be taken for a ride. This is where observing reports from different media outlets helps. When the media have been fed a story from government, they all describe it with the same wording and there is little variation from the national channels.

I’m just saying that overseas development and military hardware are likely growth industries, and that it’s not a good time for your potentially unemployed kids to sign up for military service.

High unemployment doesn’t necessarily mean there are no jobs around. Even in lockdown there is an increase in demand for delivery drivers and businesses supplying bikes and table tennis tables have been booming. Amazon is thriving, and as much as I avoid them and try to buy local, I can’t see this declining anytime soon. Unless we take action like France – to fine them for every non-emergency supply delivery that they make until they have ensured their workers are being protected from Covid-19. What we really need is a fairer tax system that taxes all turnover made in the UK, rather than a complicated tax on “profits” with lots of official loopholes, so that Amazon pay the same percentage of tax as all the small businesses they are wiping out ( I touched on this in my last very old post).

In the UK we may also see the trend of declining manufacturing industries reverse as we start to manufacture more essential goods at home. This is because countries will always protect supplies for their own citizens first. Plus transport of cargo has become more complicated, with borders more protected.

Flexible working and 4 day weeks may be more in demand, as people reassess their priorities after lockdown. If you can survive on 80% of your wages when you have time for cooking from scratch and no commute costs, then why not carry on with a more relaxed way of living? Part time working also provides more flexibility for businesses to have 20% of their labour hours in reserve if work starts slowly, so they are prepared if it ramps up again. This way they are retaining more of their trained staff with a broader expertise base, rather than opting for layoffs and then a recruitment drive once things pick up.

If the trend for homeworking continues then we could see the demand for properties in London decrease with more people choosing to live further afield. Whilst new office developments may slow, there could be bargains around for companies who can re-purpose them for higher value domestic units. Renting out hot-desking and meeting facilities could be a new growth area, to cater for companies with no main office space. I can imagine this gap being filled by Universities who may find online courses have become more popular for overseas students.

Once news outlets run out of Covid-19 drama, they will return to the normal fear-mongering about increases in crime due to the unemployed masses, so security products will be as popular as ever. I would like to hope that the new community spirit lasts and there are increases in the voluntary sector. The vacancies in the NHS may even get filled, as NHS workers are now getting the respect they deserve and there will be plenty of pressure from the public for more investment and fair pay rises. We can probably expect lots more from Extinction Rebellion too, as this pandemic has proved that the way to get change is to force a reaction.

I would love to hear about your experiences. What are your thoughts for the changes we are likely to see over the coming year?