COVID-19 IMPACT SURVEY MAY 2020
Overcoming several immediate term challenges posed by the ongoing corona virus pandemic, the global market for Recloser Control is projected to reach US$1. 4 billion by 2027. Shuttered factories and commercial establishments come as a short-term blow to utilities and for all players in the energy value chain, including recloser control manufacturers. The market is expected to witness a dip in revenues in the year 2020, as the COVID-19 pandemic brings approximately 25% of the world population under lockdown. As the world enters into a more critical phase of the infection spread, more countries are expected to follow with even more stringent lockdown and stay-at-home measures to curb the spread of the virus. The implications for businesses and industries are grim. Oil prices and energy demand are plummeting by the day as all non-essential activities come to a halt including manufacturing plants, factories and commercial businesses and establishments. The lockdown is severely impacting energy consumption which in turn is taking a toll on cash flows for energy companies. The falling consumption rates can very likely be a real-time indicator of coming economic damage. Several energy companies including oil exploration companies and utilities have already suspended projects and slashed capex. While the blow to business activities, and revenue has and still continues to be great, the coming years will still be tougher as the world now stares at a looming recession. The world economy is heading towards the worst-of-its kind recession, worse than even the "Great Recession" of 2009. Governments are beefing up emergency budgets for healthcare, sanitation and social security to fight the pandemic.
The shutdown has disrupted economic activities in a manner hitherto unimagined and the human cost of the pandemic is continuing to grow and is expected to deal an unprecedented blow to economies worldwide. As businesses struggle to keep afloat, job cuts and bankruptcies are expected to rise sending millions into unemployment. Unemployment rates are already beginning to rise, with the U.S unemployment numbers alone climbing to over 3. 3 million as a result of the ongoing pandemic. The loss in consumer confidence and erosion of household wealth and discretionary spending will impact virtually every industry and business worldwide. Governments are opening up their war chest to rescue their economies. 15 countries together have allocated over US$3 trillion, underlining the magnitude of the crisis. These financial measures for damage control to prevent complete meltdown of domestic economies will have knock-on effects for government spending elsewhere. For instance, defense spending and infrastructure spending will bear the brunt of this overspending blow. This also implies short-term pain for energy infrastructure developers and component suppliers. The current crisis is likely to cause some permanent fractures in supply chains for few energy technologies and components. A part of the electrical component supply chain, recloser controls will also feel the heat as all non-essential replacements and technology upgrades face a setback. Utilized widely in power transmission and distribution, recloser controls are purchased by electric companies and utilities to prevent and reduce outages, and limit damage to electrical lines and equipment including transformers installed all along the substation to residential utility poles. Lesser funds available for upgrading older distribution systems will come as bad news for the market in the short-term.