Professional COVID concern spikes by 18% as trustees brace for a longer lockdown
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The economic impact of the pandemic is now as much a personal as a professional issue, given the absence of a clear strategy on how or when to resume business activity. With even long-term jobs at risk, there are concerns that furloughed staff will have no jobs to return to.
No cure in sight makes trustees revise expectations
Reporting more deaths and close ones at risk, the respondents in our weekly survey see the coronavirus as increasingly unavoidable, with some saying they are “waiting to get it” and glad they took out life insurance as it is now “only a matter of time”.
While data about the spread of COVID-19 is showing signs of improvement, there is no doubt that protective measures must end at the right time and in an appropriate way. Trustees are bracing for a longer lockdown – the outbreak is expected to last nearly four more months, in addition to the month already gone by.
We need a cure, but it is a long way away, with Gilead's antiviral drug just one of those not successful enough in clinical trials. In the meantime, behavioural changes are becoming more embedded: people are shunning gatherings and outings for online-based activities done from home and shifting spending from luxuries to necessities.
Economic consequences will persist into the second half of 2022
The expected duration of macro effects has increased by over three months, exceeding two years for the first time (although we only allowed this as an option in the previous survey iteration). So it is no longer a question of whether there will be a recession, or whether the global economy will change – the debate now is about what shape they will both take.
While some pension schemes are starting to see opportunities to undo funding level damage caused by lockdown-related volatility, others are only just starting to acknowledge the full impact on technical provisions. And while the optimists expect the economy to change permanently for the better through a greater focus on resilience and sustainability, the drop-off in activity will be hard to make up.
It is still difficult to imagine the path to normality, or what the ‘new normal’ will look like, but we do know we will have new risks to deal with, be it greater austerity or rising interest rates after the unprecedented increase in public debt we have seen in recent weeks.
How much longer do you think the outbreak would last? Are you more or less worried about the economic impact? Click here to take next week’s survey.