As the coronavirus extends beyond China, early indicators of the outbreak's full economic impact are trickling in.
One report from China Beige Book, an economic forecasting firm, which surveyed more than 1,400 companies, shows an economy reeling from shutdowns and quarantines.
"Not only has every major index that we track turned negative, but every major sector of the economy is currently in contraction territory," Shehzad Qazi, managing director of China Beige Book, told Cheddar. "This is the worst result we've seen in nine years."
Armed with the fresh data from the last two months, Qazi pushed back against the narrative that China is already bouncing back from the worst ravages of the coronavirus.
"You've got people going in and flipping on the light switch, but there isn't any work happening," he said. "Many of the employees are still stranded. They can't even get back to their job sites."
Nationwide, some 31 percent of executives reported that their firms have remained closed since the Lunar New Year holiday. Among those businesses that did open back up, 29 percent still have employees working from home, and only a third of businesses say they're functioning normally.
"Most of the Chinese economy has remained under a virtual lockdown throughout the month of February," said Qazi.
Chinese auto factories, which are tightly linked to western auto part suppliers and buyers, had higher than average firm closures with 35 percent reporting they were shut down due to the virus. The numbers were roughly the same for logistics firms.
IT manufacturers fared a bit better, with just 20 percent reporting closures — though that doesn't account for the 53 percent of management who have not returned to the office.
Right now, global firms with links to China are working down their inventories, but the economic blast radius could expand if suppliers don't get up and running before those supplies run out.
"As inventories start running thin in the U.S. or Europe and supplies are not coming out of China, we may start seeing the risk of factory shutdowns right here in the United States," Qazi said.
Markets are emerging from a turbulent Q3. Horizon’s Mike Dickson shares insights on interest rates, small caps, and where investors should look in Q4 and beyond
Bambu Ventures's Kyle Pretsch dives into Lemonaid’s $10M buyout, down from 23andMe’s $400M price tag, and what’s next after Chrome Co.’s dramatic pivot.
Former Cisco Systems CEO John Chambers learned all about technology’s volatile highs and lows as a veteran of the internet’s early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology in artificial intelligence. Chambers is trying take some of the lessons he learned while riding a wave that turned Cisco into the world's most valuable company in 2000 before a crash hammered its stock price and apply them as an investor in AI startups. He recently discussed AI's promise and perils during an interview with The Associated Press.
Grove Collaborative’s CEO shares how the company is reinventing everyday goods with sustainability at the core and working toward a plastic-free future.
Atlanta Mayor Andre Dickens shares plans for affordable housing, community-led growth, and why private and public grocery stores could be key to food equity.
Tesla reported a surprise increase in sales in the third quarter as the electric car maker likely benefited from a rush by consumers to take advantage of a $7,500 credit before it expired on Sept. 30. The company reported Thursday that sales in the three months through September rose 7% compared to the same period a year ago. The gain follows two quarters of steep declines as people turned off by CEO Elon Musk’s foray into right-wing politics avoided buying his company’s cars and even protested at some dealerships. Sales rose to 497,099 vehicles, compared with 462,890 in the same period last year.
