Columbia - 8 Factors That Could Change Economies And Markets Forever
This report from Columbia Funds outlines 8 areas influenced by the COVID-19 pandemic that could permanently affect the global economy, as well as consumer thought and action. Some of these trends are already evident, while others have the potential to take hold as the pandemic subsides.
Diversification in manufacturing is likely, as businesses begin to examine the health and safety ramifications of where they source materials. Corporations may also begin to shift their capital spending in response to this diversification.
Credit Card Usage
Increases in online shopping, as well as new store policies restricting the use of cash, are likely to increase credit card usage for the long term.
Shifts in the field of health could take three forms: Increased regulations, particularly surrounding China's food industry; increased reliance on telehealth, and increased focus on other potential health crises, like antibiotic resistance.
Working From Home
The pandemic has made remote work the norm across many industries. Working from home may become a permanent fixture, leading to impacts on fields like cloud computing, real estate, and travel.
Changes In How The Tech And Pharma Industries Are Perceived
The role of technology in providing entertainment and support, and the role of pharmaceutical companies in finding a cure for COVID-19 during the pandemic, could improve perceptions and utilization of these industries after the pandemic.
Consumers are beginning to purchase more items online, particularly in the areas of grocery, education, and retail. They are also beginning to enjoy certain experiences online rather than in person (such as exercise classes streamed online rather than being held at the local gym). These changes are likely to continue and become permanent over time.
Focus On Green Initiatives
The reduction in activity and emissions because of pandemic shutdowns has led to noticeable improvements in pollution levels around the world. This glimpse into the benefits of cleaner air and water could drive investments in green initiatives over the long term.
The pandemic may also spark self-reflection on the part of corporations who now recognize the influence they have over customers, the environment, and more.
Blue Water keeps these trends in mind when considering thematic investments for portfolios.