Like other economies, countries in the GCC have been rendered vulnerable by the COVID-19 pandemic. Wholesale and retail trade, transportation and storage, and finance and insurance, which accounted for nearly 50% of Dubai’s gross domestic product (GDP) in 2018, have all been affected. In the oil and gas industry, plunging jet fuel demand and higher oil production by Saudi Arabia in April threaten to push crude oil prices to a 17-year low in Q2 2020. However, it is not that everyone and everything is capsizing. Some industries in the region have made gains and exciting opportunities are emerging, while careful risk mitigation strategies are helping others chart a new course for the future.
Based on dynamic, real-time updates, Frost & Sullivan research indicates that COVID-19 could play out in three ways:
- In the first, and most hoped for, scenario of gradual containment, the outbreak will be largely contained by April, with most economies showing signs of industry and economic rebound by May, with full recovery by Q4 2020.
- If the pandemic is not contained to a large extent by April, a severe pandemic scenario would ensue, marked by downturns in consumer demand, industrial production and world GDP growth. The possibility of a year-long recession is real with full recovery only by Q3 2021.
- The third (and least-hoped-for) scenario, a global emergency, will be marked by the uncontrolled spread of the virus with economies limping back to recovery from Q1 2021, with a full recovery only by Q1 2022.
Regardless, the duration and severity of COVID-19’s impact on economies and sectors will undoubtedly vary. Companies would do well to set in motion a “look ahead, anticipate, and adjust” roadmap. Over the short term, companies should explore supply chain diversification and leverage new opportunities arising from changing customer demands. Over the long term, product and service portfolio diversification will be critical to ensuring greater resilience.
Externally, strengthening brand equity and shifting sales channels online will be strategically important. Internally, adopting technologies that support workplace and operational continuity will enable companies to hit the ground running once the COVID-19 crisis abates.
This study examines which industries are thriving, surviving, and struggling during the pandemic. It considers the best practices that some companies have already put in place in response to the crisis, and looks at actions that participants in numerous industries can take now to respond, recover, and thrive in the long term.