Coronavirus Update Economic Impact and What to Expect

Coronavirus Update: Economic Impact and What to Expect

The coronavirus has certainly been the center of attention over the last several weeks, and if you’re reading this article, chances are you’ve come to an awareness of how big the virus has gotten on a global scale. While it’s not quite an “Epidemic”, the scale and impact of the coronavirus has had several impacts on many countries.

However, what many people don’t realize is that an illness doesn’t just affect people and the medical industry – it makes its way into everything including the economy. The coronavirus is responsible for a lot of economic fluctuations and volatility in the last several weeks. Here’s a high level overview of what’s happening and what to expect:

Coronavirus Economic Impact

So far (as of 02/20/2020), the coronavirus has affected more than 75,000 people. That’s enough to greatly impact the market, since the virus has mostly been breaking out in China – where nearly all of the U.S.’s products are produced. Here are a few ways that the coronavirus is impacting the economy and what you can expect to happen next:

Prices Increases

In certain industries, prices are expected to increase as labor shortages are at an all-time high in China. Since the virus has taken out so many people, the collective work demand is higher than ever in factories, making the price increases inevitable.

Generally speaking, these prices increases are hitting the automotive parts, smartphone and electronics, and retail industries. Since the U.S. relies so heavily on China for production in these industries, the coronavirus’s impact is introducing volatility into the mix of previously relatively-fixed pricing structures.

Another wild card in the mix is the fear that consumers will fall into fear of the virus spreading and go into defensive mode, which reduces the overall spending in the market and also increase product pricing.

Low Inventory

As you might expect, a small workforce means smaller production, and the same is the case with the coronavirus impact in China. With many workers out sick for multiple days (or in certain cases, weeks), production has been slowed down and inventory is lower than it was before. This means all factories in China may not be meeting their required quote for product manufacturing and shipment count.

If you’re in an industry that’s heavily reliant on frequency of shipments and large production volumes coming from China, you can expect to see a bit of a drop in the overall productivity of the economy over the coming weeks.


There’s a lot of risk factors here – cargo is being screened for coronavirus contamination, and port security is at an all-time high regarding the virus. This, combined with the labor shortage and low production rate in Chinese factories means that delays are inevitable. If you work in an industry such as tech or automotive parts that deals with large, frequent shipments from China, you shouldn’t be surprised to encounter a few delays along the way. And honestly, you’ll want to be thankful for that.

In the midst of a virus outbreak, it’s in the best interest of workers, companies, government, and port-workers to ensure that the virus stays as quarantined as possible. That might mean sacrificing a bit of timing here and there, but the economic and timing impacts of the virus are only temporary.


Blank sailings from China are up 50% over last year. These rippling effects will soon impact U.S. Exports too. The lack of Imports will slowly create a container shortage in the United States. Even if the coronavirus hasn’t impacted your company yet, you should still be aware of how to take action if that time does come.

Interlog USA is prepared to meet these changes head on, and we are committed to listening to our customers. Please feel free to reach out with your concerns.


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