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Impact of Covid-19 on Industries and outlook on a post-Covid / Inflationary Environment.

Automobiles :

This sector was positively impacted by the covid crisis as more people saw the need to move around
in their private automobiles which led to an increase in sales of cars. There was also an increase in
sales of lorries, scooters mainly because more delivery companies purchased them as there was a
surge in online deliveries.

Post-covid : We expect the trend in car sales to stabilize/decrease as more people begin to utilize
public transport, restrictions are lifted on social gatherings and eat-ins become more available.

Inflation : This is most likely to take a negative toil on the industry as components used in automaking becomes more costly which leads to an increase in prices of automobiles. This is likely to
negatively impact the sales growth. Another factor is the increase in cost of automobile financing
which would further deter customers from making purchases.

Banks :

Banks haven’t been heavily impacted by the covid crisis as they have found ways to cut their
operating costs and as well as perform optimally despite the restrictions. There has also been an
increase in saving by customers and all these have helped them to remain adequately positioned
during this trying times.


Post-covid : Banks are expected to continue to have a stable and steady growth post covid.

Inflation : Banks seem to thrive in an inflationary environment because as inflation increases,
interest rates also increases which helps the banks bring in more profits.

Capital goods :

This sector was impacted during the covid crisis as there was reduced manufacturing, construction
and a closure of other businesses that required their services. There was also a layoff of staffs as
factories were closed. All these reduced sales and profitability of companies in this sector.


Post-covid : As the world gets back to normal, we expect a more solid performance from this sector
and revenues is expected to increase.

Inflation : This would have an undesirable effect on the industry as the cost of raw materials needed
to manufacture goods would increase, leading to an unsustainable operating cost for this sector.

Consumer services :

The consumer service industry performed remarkably well during the covid period with an exception
to hospitality. There was a reinvigorated demand in services such as streaming, call centers, delivery
services etc. This was mainly due to the stay at home order which required us to find other things to
keep our sanity.


Post-covid : We expect a decline in the demand for these services but an increase in demand for
physical services such as the theatrical experience and the hospitality sector (hotels and restaurants
inclusive).

Inflation: This wouldn’t have an enormous effect on this industry as survivors of covid would be
more than happy to visit those places they have missed as they become to have the realization that
one can only live once.

Consumer durables :

This industry performed remarkably well during the pandemic as more customers saw a need to
improve household items. This brought about a reinvigorated demand for household appliances.


Post-covid : We expect this trend to continue post-covid as more households embrace the need to
always have updated appliances and we also expect the advent of smart homes to help spur this
industry growth

Inflation : We believe a rise in inflation would take a minimal toll on this sector.

Commercial services :

This industry has been heavily impacted by the pandemic as human interactions were limited or
close to non-existent, This industry was unable to function properly, and more people had time to
perform obligations that they would have otherwise contracted out. These resulted in poor sales for
companies in this industry and laying off of workers.


Post-Covid : We expect sales to pick up once more as more consumers continue their lives before
covid.

Inflation : This would also have a negative impact on this industry which would reduce the demand
for appliances.

Diversified Financials :

This sector is a mix between the banking and the insurance sector alongside other financial services.
It wasn’t heavily impacted during the covid19 pandemic.


Post-covid : As the world transitions to a post-covid world, the industry is not expected to be
negatively impacted as long as the companies in this industry maintain the mix of services they
provide.

Inflation : The industry is also expected to weather an inflationary environment if their exposure to
the insurance sector isn’t that high.

Energy :

The covid era took a significant toll on the energy sector as demand for energy dropped in all parts
of the world. There was also a decline in various activities all across the world which further stalled
the demand for energy.

Post-covid : The world is gradually returning back to normal and the energy industry have gradually
been performing better. This is expected to be the trend as various activities in the economy begins
to operate. Oil Prices have also been increasing and this is forecasted to be the trend at least till
iranian oil returns back to the market which is likely to send oil prices crashing down.

Inflation : This is not expected to have a negative effect on the energy industry.

Food, beverage & tobacco :

This industry benefitted greatly during the pandemic as consumers picked up more habits such as
cooking, drinking and smoking.


Post-Covid : This trend is expected to continue post-pandemic as people who picked up smoking
habits, cooking, or drinking are not expected to abandon their new found habit in a very short time.
It is expected to continue before these habits stall or declines.

Inflation : An Inflationary environment would hurt this industry as people would find it difficult to
sustain those habits which would lead to a decrease in demand for their products.

Healthcare :

The healthcare industry performed well during the covid crisis as more people began to take their
health serious and purchase more healthcare products,


Post-covid :
we expect this trend to continue post-covid and we also expect significant investment
from the government into this industry.

Inflation : This is not expected to significantly impact this sector as a rise inflation wouldn’t stop
People from visiting the hospital when they fall sick. It is one of those essential services we can’t do
without.

Insurance :

This sector wasn’t negatively impacted during the pandemic although there were lesser requests to
insure but there were also lesser casualties while premiums were still paid. This had a cancelling out
effect which ensured the insurance industry didn’t run at losses.


Post Covid :
The insurance sector is expected to have a gradual growth post-covid as more people
see the need to insure various properties and for future casualties.

Inflation : Increase in inflation would significantly affect the insurance industry as they would be
required to pay more for damages and this would ultimately increase their operating costs.

Media :

The media industry has had a particularly good time during the pandemic ranging from social media
companies to traditional media and the new streaming services, All have seen more users on their
platforms.


Post-covid : We expect this trend to flatten out as people fijd other means of communicating rather
than on the internet.

Inflation : is also expected to take a negative toil on companies in his industry as this would deter
more users from subscribing to their services.

Pharmacueticals and biotech :

The companies that benefitted most in this industry are those that ventured into the treatment and
production of vaccines for the corona virus. However, this industry particularly the biotechnology
aspect is expected to have wonderful prospects and it is currently touted as the future of medicine.


Post-covid : We expect further investments in this aspect post-covid as it could revolutionize
healthcare.

Inflation : This is not expected to have any effect on this industry as it is considered to be very
important in future healthcare.

Real estate :

This industry during the pandemic was very strong . sales recorded were massive as buyers required
more spaces since they were confined at home. The low mortgage rate also encouraged more
homebuyers to purchase properties during the pandemic.


Post-covid :
we expect this trend to flatten out and fall as mortgage rates rises and buyers lose
appetite for homes.

Inflation : An inflationary environment isn’t also going to be the most ideal for the real-estate
industry as an higher inflation implies higher interest rates which spells doom for this industry.

Retail :

This industry was and wasn’t significantly affected by the corona virus. the small retail enterprises
were deeply affected as they were unable to quickly scale to to be able to offer online services,
however the big enterprises who did that were able to profit from the surge of retail products
demanded from the consumers.


Post-covid : The retail industry is expected to grow at a marginal rate post-covid because consumers
didn’t stop buying during covid and they won’t stop buying post-covid.

Inflation : Higher inflation rates erodes purchasing power, making it less likely that consumers have
excess income to spend after covering basic expenses. This would deter consumers from buying
more which would significantly affect the industry.

Semiconductors :

This industry is one that has benefitted immensively from the covid 19 pandemic. This is because our
behaviour, appetite and demand for products changed during the pandemic, More people
demanded for cars, video game consoles, computers with high-end chips, mining tools for
cryptocurrencies and etc. All these products requires the use of semiconductors and as the demand
skyrocketed, Inventories were depleted and supply was significantly lesser than the demand. These
has led to a shortage of semiconductors all around the world and companies in these sector are
working round the clock to meet the demands.


Post-covid : We expect this trend to continue for a while post-covid before it tapers down as more
people find other hobbies and engagements.

Inflation : This is likely to take its toil on this industry as it would consequently lead to a fall in
demand for these products which could lead to a supply surplus.

Software :

There was a huge demand for the products of these industry during the covid era especially with the
popularization of saas (software as a service). More companies began to understand how powerful
data is and they began to purchase softwares that would enable them manipulate data to drive up
sales.


Post covid : We do not expect this trend to stop as more and more companies would demand for
their products to continue to drive up sales and optimization.

Inflation : It isn’t also expected to have an adverse effect on this industry as their products/services
could seem indispensable.

Technology :

This sector had an impressive performance during the covid crisis as people tried to be productive
even while at home by utilizing products such as distance learning, distance working tools. Even our
social media platforms realized more users as people spent more if their tine on the internet.


Post-covid :
We expect the uptrend in the use of technology products to flatten out post covid as
people reduce their reliance on them.

Inflation : will negatively impact the tech industry as high interest rates are likely to increase the cost
of borrowing which would negatively impact this sector as majority of companies in this sector are
unprofitable.

Telecom :

The pandemic didn’t weigh as much on this industry as demand for its services were still required.
However, the deployment of 5g services were delayed because of inadequate workforce as a result
of the stay home order.


Post-covid :
The 5g service deployment is expected to further grow the industry and we expect this
to be the case post-covid.

Inflation : We do not expect inflation to adversely affect this industry as there would always be a
demand for their services.

Transportation :

This sector has been deeply impacted negatively by the covid 19 crisis. This is as a result of the
restrictions in movements all across the world (Airlines, Bus transit, Rail transit, Water transit).
Companies in this industry have had to experience high operating costs and low revenues during
that period.


Post–covid : We expect this trend to change post-covid as more people travel and engage in
activities they did pre-covid.

Inflation : We still do not expect inflation to negatively impact this industry as we believe nothing
would stop people from traveling once restrictions are lifted.

Utilities :

This industry wasn’t heavily impacted by the covid-19 crisis as the demand for their services didn’t
fall. This industry doesn’t react much to economic activities and is often seen as the industry which
would weather any economic condition.


Post-covid : This industry is expected to remain active in a post-covid world. We expect gradual and
stable growth for this industry.

Inflation : We don’t expect this industry to suffer in an inflationary environment as the sector
provides things that we can’t do without

Author

Temitayo

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